Bellinger Moody: CMS TEAM — Alternative Payment: Transforming Episode Accountability Model

This episode of the Anesthesia Economics Podcast was recorded live at the Anesthesia Economics Summit in Charleston.

In this episode, Bellinger Moody explains the TEAM model. The Transforming Episode Accountability Model (TEAM) is a new mandatory CMS alternative payment model that holds hospitals financially accountable for surgical episodes from the operation through 30 days post-discharge, shifting care from fee-for-service to value-based care and tying bonuses or penalties to cost and quality performance over a five-year period starting in 2026.

The episode-based bundled payments, composite quality scores, and escalating upside/downside risk make perioperative medicine clinics critical for pre-op optimization, standardizing pathways, reducing cancellations, preventing post-acute cost overruns, and serving as a data backbone so hospitals can control episodes instead of absorbing CMS paybacks.

Explore the full episode here: https://www.medaxion.com/bellinger-moody-cms-team-alternative-payment-transforming-episode-accountability-model

Jeff McLaren introduces the speakers and panelists whose discussions were recorded live at the 2026 Anesthesia Economics Summit.

Watch on YouTube. Learn more about Medaxion's solutions.

Transcript

What Is TEAM

SPEAKER_00 0:05

So uh, you know, Gary and I, we've been working uh as colleagues now for many, many years, and uh he keeps me honest. I call him my little bean counter because I have all these grand ideas, and Gary always says, Bellinger, these are the numbers, we can't do that. So um, so you know, when we started looking at this whole model of perioperative medicine, um, one of the things that came to mind for me was team, okay, because this is something that is going to change the way that we perform uh our services, and it's basically going to require a shift in the way we do things. Um and I'm gonna talk a little bit about what team is, okay, and what it's going to do in terms of um services for hospitals, okay? So let's get started on that. So, what is team? Um team stands for Transforming Episode Accountability uh Model. And it's a new alternative

From Bundles To TEAM

SPEAKER_00 1:00

payment model uh from CMS that started January 1, 2026. So uh what CMS did was they targeted 745 hospitals across the country. So you may not even know that you're in it, but you are. Um, and they did open it up for some volunteer hospitals. So they started with 735, and they said, We'll we'll allow some of you to volunteer to participate. And that was back in 2025, um, and they had like 10 hospitals that volunteered. Okay. So what it is basically is a transition through the bundle payment uh uh for care improvement to the comprehensive care for joint replacement to now team, and I'm gonna talk about that. So this is the model here aims to enhance the quality of care for Medicare beneficiary by holding the hospitals responsible for the entire episode of care from the beginning of the surgery all the way through 30 days past discharge. Okay, that's

Episode Accountability

SPEAKER_00 2:00

what this is. And so what's gonna happen is you there's gonna have some stop loss uh here where you could get 10% as a bonus, or you could be you could be uh penalized 10%, and that's gonna increase over a five-year period. So this is a five-year program uh that CMS has put in place that's gonna go from January 1, 2026 through December 31st, 2030. Okay. Now, so as I said, you you you're going to see a pro progression from fee for service to what? To value-based care. That's what's happening here. And if you don't know it yet, the three primary drivers of health care going into the future are patient satisfaction, right? Reduction in costs, and improvement of quality quality care. So if you're not on that boat yet, this is gonna help you get on it. Um, help the hospitals get on it. So you started with a voluntary pilot stage BPCI program that moved to a more structured,

Tracks And Risk

SPEAKER_00 3:00

uh, mandatory, comprehensive care for joint replacement model, right? And it was voluntary at first, and then when you got when you got to the C CJR, parts of it were mandatory. Well, guess what? Team is mandatory, okay? So we're gonna talk a little bit about that um evolution here. Um so CMS introduced the BPCI back in 2013, and it was one of the first steps CMS took toward bundle payments, right? And focus on aligning uh incentives among providers to reduce costs while maintaining uh the quality of care. Then they moved to CJR, right? And this was an expansion of the bundle payments initiative, and they built on the BPCI success and introduced the CGR model, which specifically targeted hip and knee replacement procedures, right? And they held uh a bunch of people accountable for the costs associated with that. Now, what's gonna happen going forward, and this

Target Prices & Data

SPEAKER_00 4:00

is what I see happening in the future, is you're gonna have people, specialties and different specialties fighting for a portion of that bundled payent that's gonna be given to the hospitals. And you're gonna have to be able to prove what you're gonna get as a part of that. So um I think the perioptic medicine clinic is gonna play an important part of that, and I'm gonna talk about that here in just a minute. So then they morphed into what's called team now, right? This all new alternative payment model, and they expanded the surgeries that this up this applies to. So now we're talking about spinal procedures, we're talking about knees, hips, we're talking about even inpatient ankles, total total ankle procedures. Uh, we're talking about cabbages and and major bile procedures that this uh program uh actually applies to. Okay. Now, so as I said, it's a mandatory uh participation uh for 740, well, 735 hospitals, then went to 745 because

Role Of Periop Clinic

SPEAKER_00 5:00

some hospitals volunteered uh to participate in it. Now, what I think is gonna happen over the next few years is after they get the performance data from this year, they're gonna take a look at it and then they're gonna require more hospitals to be involved in it, okay? Uh but as it stands right now, there's no more voluntary um participation in it. They opened it up in 2025 and they closed it. Um, so there will be episode-based payment in this model. Um, hospitals received a bundle payment for specific surgical services, like I said before. Um, and then there's target procedures, the cabbages, the bowels. I talked about that just a minute ago. But they're gonna utilize quality metrics, okay, as a part of this program. And then something called a composite quality score that they're gonna use in addition to what they call a reconciliation of payment, right? The cost report that you send it to Medicare, they're gonna reconcile that based on three years of data, previous years of data, and they're gonna have target prices set, right, that you're gonna have to either meet,

Preventing Post-Acute Losses

SPEAKER_00 6:00

if you don't meet it, all right, then, or if you exceed it, you may get a bonus on the quality metrics, right? If you don't, uh if you're below it, then you're gonna have to pay money back to CMS, okay? And we'll talk about that here in just a minute. Um again, the key here is financial accountability for the entire episode of care. And here I talked about the target prices for episodes. Um, those are gonna be uh done each performance year, it's gonna be re-evaluated, all right, and they're gonna set new target prices each year. All right. So what I anticipate will happen is after the first year, you know, most of the hospitals are not gonna really do very much in it. And you don't have to change much of what you're doing because a lot of the data is gonna come from your inpatient um uh quality reporting that you're currently doing, as well as outpatient quality reporting. That's where they're gonna get a lot of the data from. So you're not gonna have to change a lot of things the first year. And the first year basically is all upside. So after that first year, then I think hospitals are gonna start taking

Quality Scores & Readmissions

SPEAKER_00 7:00

a look at it and saying, hey, what do we what what what did we miss here? And what are our shortages where we can come back and make sure that we don't pay at the end of the next target year? All right. So there's three tracks that uh that this is that are gonna be applied here in CMS team, okay? And I'm gonna talk about those three. So the first year, um, the first year performance year, track one, all uh team participants are eligible in track one. And there's only an upside risk here, right? So you can only get a bonus, there there won't be a penalty, right? Now, in track two, um, the participant, the eligible participants are your safety net hospitals, your rural hospitals, your Medicare dependent hospitals, um, sole community hospitals, and essential access community hospitals, all right? And in this track, there's an upside, and this is for performance years two through five. All right. So um there's an upside and downside risk, and a 10% uh stop uh stop gain uh loss

Leadership & Alignment

SPEAKER_00 8:00

uh in terms of what you could pay or what you could receive, okay? And the CQS adjustment, that composite quality score that I talked about, um, that's gonna be uh up to 10% for positive reconciliation amounts. Okay, so you may get a bonus of 10%, or it's gonna be 15% for a negative um uh uh reconciliation amount. You're gonna have to pay 15% of that back uh to CMS. And then track three, again, it moves up 50 to 20 percent. Um, and then CQS adjustment is 10%. So um, as you can see, it goes up uh each year. Now, let me talk about why I think the perioptive medicine clinic is so critical here. I see the perioptic medicine clinic as one primary mechanism for hospitals to make sure that they meet these team requirements. Because what it does is it up, it front loads risk management, right? The perioptive clinic operates before the patient enters the uh the team episode, and it focuses on

Final Takeaways

SPEAKER_00 9:00

optimization, it focuses on medical reconciliation, those things that are important to making sure you meet the quality metrics. It reduces avoidable cancellations and delays. Um, same-day surgical cancellations are pure what? They're pure cost under the team model. That's what it's gonna be, pure cost. And it standardizes the care pathways that are utilized um for in periopital uh medical clinics. So you're talking about evidence-based pre-op testing, uh, you're meeting the uh ERAS protocols, opioid sharing, uh sparing, anesthesia plans, those kinds of things. So um it also prevents post-acute cost explosions. Most team financial losses happen after discharge, right? Not in the not in the preoptive medical perioptive medical clinics, right? I mean, not in the OR. So CMS heavily weighs um readmissions, and readmissions are gonna play a big part in that composite quality score. So so is uh skilled nursing facility length of stay and emergency department bounce backs. Um, so that is going to feed into your composite quality score that they utilize to weigh what, and that scale is from zero to one hundred, then you're gonna have a number assigned, and they're gonna weight that when they decide how much you're gonna pay or how much you're gonna receive, in addition to what was spent. Okay. And then the perioptive clinic also serves as what I consider to be uh a data backbone for uh for this whole team thing, because better documentation um leads to more accurate target pricing and less um downside risk if if you're documenting correctly. Okay, now let me talk about some takeaways here and I'll end this. Um team shifts the financial risk upstream, right? So financial performance is now going to be driven before the surgery and not after discharge. Okay? So hospitals that don't manage uh pre-op risk, you will absorb avoidable downstream costs. You will absorb those costs. Um post-acute utilization is the biggest margin threat because most downside risk in team comes from SF uh utilization and length of stay, readmissions, and as I said, emergency department bounce backs. Okay? So clinical variation is also now a financial liability because team rewards what? Predictability and it penalizes unwarranted variation across pre-op testing and length of stay. Okay? So um a couple of other takeaways. Leadership is gonna have to have alignment, okay? And that leadership alignment determines whether you're going to succeed or fail under team, okay? Because it cuts across surgery, it cuts across anesthesia, hospital medicine, care management, finance, it cuts across all of that. So um the other thing I want you to be realize and take away from this is team converts, what it does overall is it converts surgical episodes from volume-based revenue risk, revenue to risk management portfolios, and hospitals either are going to control the episode or you're going to absorb the cost. That's what's gonna happen. You're gonna either you control that episode or you're gonna be paying back uh money to CMS. So I want to talk about the perioptive medicine clinic value contribution to team. Um, as I said, team shifts the risks upstream. So the perioptic medic medicine clinic is now how hospitals can manage and mitigate that risk before it becomes expensive for the hospital. So hospitals without a strong periopedical clinic, you're gonna struggle under team. Okay? So if you haven't looked at the periopedicine clinic, I strongly recommend that you do so. Take a look at what you're doing right now because a lot of you are providing the services, but you're not billing for it. And hospitals with a strong PMC, you you'll be able to bend the cost uh curve and and and protect your margins there, okay? Um, so that's basically what I wanted to talk about today. Uh, again, you know, you want to make sure that you are uh aware of what's happening with team. If you have any questions or if you want more information about it, I'm happy to provide that to you. Uh, I'll be around for questions if you want to.