CMS finalizes TEAM model in FY 2025 IPPS final rule

CMS finalized its proposal to implement a new mandatory episode-based payment model in the fiscal year (FY) 2025 Inpatient Prospective Payment System (IPPS) final rule. The Transforming Episode Accountability Model (TEAM), which is set to begin on January 1, 2026, and run for five years, is designed to support Medicare beneficiaries undergoing certain surgical procedures by improving care coordination, quality, and costs.

IPPS hospitals located in one of the core-based statistical areas listed in the FY 2025 IPPS final rule will be required to participate in TEAM. They will be responsible for overseeing patients’ care from the time of hospital admission or outpatient procedure through 30 days after they leave the hospital, according to CMS.

Participating hospitals will continue to bill Medicare fee-for-service, but they will receive a target price based on included Part A and B items and services included in an episode, according to a fact sheet on the model.

Episodes will include the following:

• Inpatient hospital services
• Physician services (specialists and primary care)
• Outpatient therapy
• Skilled nursing facilities
• Home health services
• Clinical laboratory services
• Durable medical equipment
• Medications (Part B drugs and biologicals)
• Hospice

TEAM episodes will test the following procedures:

• Lower extremity joint replacement
• Surgical hip femur fracture treatment
• Spinal fusion
• Coronary artery bypass graft
• Major bowel procedures

Participating hospitals will be evaluated on their spending and performance based on quality measures such as hospital readmissions, patient safety, and patient-reported outcomes.

CMS also posted an FAQ and other resources on its TEAM web page.

Editor’s note: See more NAHRI coverage of the FY 2025 IPPS final rule here.