Hospitals see 'too much risk' in CMS' proposed TEAM model

The American Hospital Association has pushed back against CMS' proposed Transforming Episode Accountability Model, which is part of the inpatient prospective payment system role for fiscal year 2025. 

"[It] is proposing to mandate a model that has significant design flaws, and as proposed, places too much risk on providers with too little opportunity for reward in the form of shared savings, especially considering the significant upfront investments required," the AHA wrote in June 10 comments to CMS. 

The proposed mandatory payment model would bundle payment to acute care hospitals for five types of surgical episodes:

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

These five surgical episodes comprise more than 11% of inpatient prospective payment system payments and does not include outpatient payments that would also be at risk in the model, according to the AHA. 

CMS said the proposed model would test whether episode-based payments for the five surgical episodes would reduce Medicare expenditures while preserving or improving care quality. The agency argues that the model could incentivize coordination between providers both during and 30 days after a surgery, and require referral to primary care services to support continuity of care and drive positive long-term health outcomes.

"If CMS cannot make extensive changes to the model, it should not implement it at this time," the AHA wrote. "To do so would make TEAM no more than a thinly disguised payment cut, as it fails to provide hospitals a fair opportunity to achieve enough savings to garner a reconciliation payment."

The AHA urged CMS to make participation in the model voluntary, reduce the discount factor from 3% to no more than 1% and make several design changes. 

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