Feds Seeking to Save Medicare Money on High-Volume, High-Cost Procedures

Federal officials are taking a TEAM approach to saving federal dollars on certain high-volume, high-cost surgical procedures with a new program embedded in the recent Proposed Rule for inpatient and long-term care hospitals (LTCHs) for the 2025 fiscal year.

All-caps fully intended: that’s the Transforming Episode Accountability Model (TEAM), which is slated to begin on a mandatory five-year trial basis, starting in January 2026.

Specifically, officials said, they want to see if the new model could reduce Medicare expenditures for the designated procedures while preserving or enhancing the quality of care, hoping it will “incentivize coordination between care providers during a surgery, as well as the services provided during the 30 days that follow, and require referral to primary care services to support continuity of care and drive positive long-term health outcomes.”

Officials said the model would complement other Centers for Medicare & Medicaid Services (CMS) value-based care initiatives by promoting collaboration with accountable care organizations (ACOs).

“Before and after surgery, people on Medicare often experience fragmented care, especially following hospital discharge. This can lead to complications, prolonged recovery, unnecessary care, and even readmissions,” Liz Fowler, CMS Deputy Administrator and Director of the CMS Innovation Center, said in a statement. “By bundling all the costs of care for an episode, this proposed rule can incentivize care coordination, improve patient care transitions, and decrease the risk of an avoidable readmission.”

The designated procedures include lower extremity joint replacement, surgical hip fracture treatment, spinal fusion, coronary artery bypass grafts, and major bowel procedures – several are estimated to be performed hundreds of thousands of times annually in the U.S.

In a news release about the broader Proposed Rule, officials noted that the TEAM model would also speak to the American health system’s climate resilience and sustainability; individuals would be able to collect and voluntarily share greenhouse gas emissions data with CMS, and CMS would provide technical assistance to them to enhance organizational sustainability.

For a fact sheet on TEAM, visit: https://www.cms.gov/files/document/team-model-fs.pdf

For frequently asked questions (FAQs) on TEAM, visit: https://www.cms.gov/team-model-frequently-asked-questions 

Mark Spivey is a national correspondent for RACmonitor and ICD10monitor who has been writing and editing material about the federal oversight of American healthcare for more than 15 years. He can be reached at mcspivey33@gmail.com.