Are Hospitals Procrastinating on TEAM Model Work?

The CMS Innovation Center’s mandatory Transforming Episode Accountability Model (TEAM), which just went into effect this month, aims to improve the patient experience from surgery through recovery by supporting care coordination and transitions of care to reduce avoidable hospital readmissions and emergency department use. Healthcare Innovation recently spoke with Tobin Lassen, executive vice president and chief bundles solutions officer at Cedar Gate Technologies, an IQVIA business, about whether the 741 hospitals chosen to participate in TEAM are taking the necessary steps to succeed when the downside risk portion of the model goes live in January 2027. 

TEAM episodes begin with lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedures. Under the model, select acute-care hospitals will coordinate care for people with Traditional Medicare who undergo one of the surgical procedures included in the model and assume responsibility for the cost and quality of care from surgery through the first 30 days after the Medicare beneficiary leaves the hospital. The model design includes a one-year glide path, which would allow organizations to ease into full financial risk.

Lassen has been working on bundled payments for close to 30 years, starting by helping heart surgeon Denton Cooley, M.D., who did the very first bundle with Medicare in the 1990s. Lassen helped co-found a company called Global Health Care Alliance, which took bundles nationwide, and then Cedar Gate acquired it in 2018. Cedar Gate's portfolio of solutions revolve around value-based care, and it also has a population healthcare management platform and analytics solutions. 

Healthcare Innovation:  I imagine most of our readers have read about the TEAM model, or if their hospital was chosen for it, then they're really aware of it. But in case we have readers who aren't aware, could you outline what CMS is hoping to accomplish with it, and whether it's based on lessons learned from previous episode-based payment models?

Lassen: Yes. TEAM is a retrospective episode-based bundled payment model. CMS sunsetted the BPCI-Advanced model at the end of 2025, and there was a lot of dropout in that model, primarily because providers were basically competing against themselves. They were benchmarked against themselves, and the targets kept moving, so there was a lot of provider attrition. CMS wanted to solve that issue, improve the patient experience, and incentivize the hospitals to stay in and promote more collaboration. 

Rather than a voluntary model, they were going to make it mandatory for 741 hospitals — about a quarter of the hospitals around the nation. They set the target prices prospectively for them, but they can be adjusted based on performance. They are going o base the bundle benchmark target prices for the five bundles on regional targets, not against yourself, and those regions are divided into the nine census regions. You could have a region with eight or nine states in it, or a region with one to two states in it, so there could be wide variation. I'm no longer benchmarked against myself and competing against myself, but I have to compete against all the hospitals within that benchmark census division. This impacts about 45 different states, including the District of Columbia. There are three participation tracks, and each has a different level of financial risk. The track one everybody's in the first year, including the safety net hospitals. There’s no downside risk in the first year. You could get a positive reconciliation up to about 10% in the first year. But starting in 2027 all of the hospitals that are not safety net hospitals will fall into track three, which is upside and downside of 20%.

HCI: So there is a glide path in the first year, but then in 2027 it gets real.

Lassen: Yes, it gets very real. What we have been seeing is that it's been pretty difficult to talk to all these hospitals that are mandated at risk. They're all saying I don’t have to worry about it. It's not until 2027. What I've been trying to tell them is it's a big adjustment to go from fee for service to full episode bundle risk, especially when all of a sudden it's 20%. That adjustment takes time. I tell them they need to prepare now. You may think that you know everything because of BPCI-A, but these bundles are very different.

HCI: I saw a recent reference to a survey of clinical quality leaders about their preparation for TEAM, and 77% said they're not ready for the model to take effect, and they cited things like fragmented systems and insufficient training and onboarding, lack of visibility into staff, usage of protocols or guidance. Is that what you are hearing? Or are there other issues that you think are going to be a challenge for clinical quality leaders in preparing for 2027?

Lassen: I guess one of the top ones I am hearing is that there are just a lot of other competing priorities right now for hospitals, with margin analysis and reimbursement reductions in other areas. So TEAM doesn't seem quite as important right now. They just aren't worried about it because they think they don’t have any downside risk in the first year, so they’ll just hang in there and deal with it next year. So it's just procrastinating, putting it off. Or they may think that consulting firms will help them deal with it once it gets under way in 2026. I try to tell them they cannot deal with this as a one-off consulting project, because of the complexities. 

HCI: Are there a lot of care coordination considerations with either home-based care or primary care in the follow-up to a procedure that they are going to be financially responsible for — and therefore have to do a better job of care coordination than they might otherwise in the fee-for-service model?

Lassen: Yes and no. Let me tell you the no part first. In the old bundle, BPCI-A model, it was 90 days post-op — that’s what they were at risk for, which meant that most of the providers could find most of their shared savings just focusing on post-discharge things like SNFs and home health. The substantial majority of spending in the five TEAM episodes is procedural. It's only 30 days. So what that means, in some of the studies I've seen, the post-op care is less than 30% of the total spend. The focus has to shift now to the anchor stay and surgical quality and effective care transitions and support. Here's the yes part. For tracking the patient's post-discharge, they are required to refer to a PCP. You do need to track them properly for 30 days to help prevent a readmission, because a readmission will just kill you in TEAM. That'll set you upside down immediately. 

Potentially, you are going to have some readmissions. The key is, how can I manage them better than I normally have? Can I use care coordinators in a different way? Can I set up some outpatient clinics or home health, rather than getting patients in a  SNF? They're going to have to focus on improving efficiency. 

I would say one of the key things they really need to look at is provider performance across each bundle. How did the set of providers that admit and attend at their hospital, across these bundles, perform relative to the others? Because you're going to need to partner with clinicians and care coordinators to track patients. That's a big part of the analytics that I believe that they need to do now. They can't wait. If they wait, they're already too late. You need to look at the analytics and find all the levers that can be pulled to improve the performance among the providers that are performing these particular five procedures in the bundles.

HCI: Could you talk about some of the features of a Cedar Gate solution designed to help these hospitals with their performance in this model? What are some things you can offer them?

Lassen: There are two major things. One is our value-based care analytics model, which has a whole bundle modeling component to it. We have set up in that module to be able to import the CMS data that's coming in. CMS is providing it to the hospitals, and we already have a set of dashboards that look at everything and allow users to drill down. How do I perform relative to the benchmark? Which ones am I having trouble with and why? It will start drilling down into the why and it'll even get down to which providers are creating more of the issues for me than the others, That's what's key, because then you can develop a plan, and you can implement changes that will fix all of that before you go 20% downside risk.

The second piece of our product that can help them is our care management platform. So this has to do the 30-day post-op tracking of the patient, and we've set up all five of the bundles, and we created essentially care management plan protocols. This is what you do day one, and these are the questions you ask. Depending upon the answers, it will give you a different kind of treatment plan for that patient. And then it moves on to day two, day three and day four, all the way to day 30. It alerts all the care coordinators and clinicians who are involved in that care plan, post-discharge. 

HCI: Does it matter whether the primary care, home care or other caregivers are part of the same health system network, as far as whether sharing data or aligning goals with them works well in this model?

Lassen: Yes, absolutely. Some of the more sophisticated providers are starting to figure out if I win in the shared savings, I can create my own agreement with the downstream partners to share some of that savings with them— and even open up the kimono and share what I'm seeing in the analytics and dashboards. They can show them how they're performing relative to the rest of the market and help them change their behavior, too.

HCI: Do you think that the 75% of hospitals that weren't chosen to participate in this first group are relieved and thinking now I don't have to worry about that? Or should they also be thinking that CMS is likely to eventually expand this program out?

Lassen: I definitely think they're going to expand this. They are fully committed to mandatory models. They have created the new ACO REACH model called LEAD, and they have ACCESS for chronic care, and the ambulatory specialty model. They're trying to drive technology into helping manage the patients and their conditions and do prevention and chronic care management to prevent some of these high-cost procedures. 

But when they do have the high-cost procedure, they want them to go to a hospital where there is a mandated program to help control the cost. This is just the tip of the iceberg. I think they are going to add more of these bundles, and they will add more hospitals over time and mandate them. Maybe they'll pick a few more procedural bundles, but they'll probably start to drive to some more of what I'll call chronic condition-based bundles as well.

HCI: For things like kidney disease?

Lassen: Yes, it could be. Diabetes, pre-diabetes or COPD could be added. I think they will definitely add more procedural bundles. The beauty of these procedural bundles is that if CMS is willing, they could convert these to prospective payment models. Right now TEAM is retrospective. Everybody is still paid fee for service, and then they send you settlement reports, and you settle up, up or down, after the adjustments. But these five procedural bundles are beautifully designed for paying prospectively. CMS could prospectively set the price ahead of time. They would already have built in their savings actuarially. Then the hospitals would have to find all the levers quickly. It would teach the delivery system way faster than if you do it retrospectively.