In this column, I strive to communicate resources that might help our colleagues, no matter their surgical discipline, practice type, career stage, or geographic location. We are The House of Surgery®, and we exist to unite all surgeons and help ensure they and their patients have the best possible outcomes.
One area that may be unfamiliar to some members is how we are working to assist US surgeons through the evolution of payment models in our healthcare system. In fact, this is a crucial part of our work advocating for surgeons and advancing quality.
The Centers for Medicare & Medicaid Services (CMS) has announced plans to implement the Transforming Episode Accountability Model (TEAM), a new payment model that will go into effect January 1, 2026, and last until December 31, 2030.
Episode-based payment models have been in use for some time, and this new program helps answer the question about how they might expand. TEAM will pay hospitals for a defined episode of coordinated care, including any specified surgical procedure and all inpatient and outpatient follow-up in the 30 days after discharge. The eligible procedures for the first program year are lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass grafting, and major bowel procedures.
A previous episode-based payment model, the Bundled Payments for Care Improvement (BPCI) Advanced Model, was voluntary. TEAM will be mandatory for hospitals selected by CMS. Approximately 741 acute care hospitals in 188 markets nationwide that already participate in a Prospective Payment System have been selected, including both rural and urban hospitals in both safety-net and non-safety-net categories. (Hospitals that remain in BPCI Advanced also can voluntarily opt into TEAM.) In total, approximately 7.5 million Medicare fee-for-service beneficiaries within these hospitals’ catchment areas will be affected by TEAM.
Payment per episode of care will be based on regional pricing averages, risk-adjusted by patient mix, and further adjusted with a discount factor to provide savings to the system. Importantly, hospitals will both bear financial risk and have an opportunity for gain. While the payment model is not yet finalized, analyses presently suggest many hospitals are likely to lose money.
The ACS is committed to the transition to value-based care and envisions episode-based payment models as the logical progression for surgery. We recognize that these changes present real challenges to hospitals and surgeons who participate, and we are actively taking steps to advocate for surgeons and offer resources as hospitals prepare for the new model.
In mid-April, the ACS Division of Advocacy and Health Policy sent letters to new CMS Administrator Mehmet C. Oz, MD, as well as to Secretary of Health and Human Services Robert F. Kennedy Jr. Both letters expressed our willingness to collaborate with CMS on episode-based payment models, including TEAM, to ensure they offer the best possible approach for our patients.
Our letters particularly emphasized the importance of including appropriate quality measures in episode-based payment models. Quality performance and economics are inextricably linked in that higher-quality care reduces length of stay and complication rates, and both can increase expenses. Any payment model that rewards reduction by limiting care and does not give equal emphasis to enhancing quality threatens to underfund critical services, resulting in a race to the bottom that hurts patients.
With more than a century of experience with quality improvement programs, we contribute meaningful insights to this effort while cutting costs.
The ACS also is collaborating with the Institute for Accountable Care at Brandeis University to offer additional resources. This January, we hosted a webinar that was attended by representatives of more than four dozen hospitals across the US. The webinar recording and slides remain available at facs.org/advocacy/team. As TEAM evolves and is implemented, we anticipate continuing to provide resources.
I routinely quote the ACS motto, “To Heal All with Skill and Trust,” because it remains the guiding principle for all we do. For all prospective surgical patients and all surgeons affected by TEAM and other alternative payment models, it is important that we influence this evolving sector of our healthcare system. If you are a surgeon in one of the selected hospitals, please engage with our resources and let us help you.
Quality and Safety Conference
If you are interested in learning more about aligning payment and quality, please join us at the 2025 ACS Quality and Safety Conference, July 17–20 in San Diego, California. Registration is now open at facs.org/qsc2025.
Clinical Congress
Registration is now open for Clinical Congress 2025. We look forward to welcoming surgeons to Chicago, October 4–7, for an updated program, including broad thematic sessions as well as a new Windy City Welcome Reception directly after Convocation on Saturday evening. Learn more at facs.org/clincon2025.
