Episode Overview
Join Daniel and special guest Lucy Zielinski, an expert in value-based programs and HCC coding , as they unpack what the TEAM model entails and what participating hospitals must do to prepare for the January 1, 2026 implementation. Gain insights how this model influences financial performance, drives care coordination redesign, and introduces new incentives and penalties. Whether you are a healthcare leader, provider, or payer, don’t miss this overview of one of CMS’s initiatives shaping the future of value-based care.
LISTEN TO THE EPISODE:
Daniel Marino:
Welcome to value-based care insights. I am your host, Daniel Marino. On today's episode, we're going to dive into the new TEAM model that was recently released or has been discussed with CMS. For those of you that don't know about TEAM. TEAM stands for the transforming episode accountability model. It is a 5-year mandatory episode-based pricing model. Very similar to the bundled payment model or BPCI, or BPCIA that was released a few years ago, it's sort of the next version of that. And in a lot of the conversations that that we've had with a lot of our hospital leaders and CMOs, and so forth. They know that this was coming. They have an idea of sort of what TEAM is, but they're really not sure what to do about it. So we thought on this on today's episode, we're gonna dive into it. We're gonna talk about where it's at, and how organizations, how hospitals really do need to start to prepare for it. So what is the TEAM? What is TEAM? What is it based on? And the surgical episodes? Well, it's based on 5 surgical episodes. These are the high volume, high cost, surgical procedures that are done in the hospitals. So the 1st one is lower extremity, joint replacement- LEJR. Second is surgical, hip/femur fracture treatment. 3rd is spinal fusion, 4 is coronary artery bypass grafts, cabbage, and 5 is major bowel procedures. All of those again, are usually the top episodes. The one that sort of stands out when I talk to a lot of healthcare leaders is the femur fracture treatment that's not necessarily in the past been that much of a episode based component. Certainly hip replacements, knee replacement has. So this is going to be a little bit new for organizations. So a couple of things that are interesting about this, the way that CMS is pricing this again, it's an episode-based pricing model. So the thought is that there's going to be one fee or reconciliation of that fee for surgeons, for the hospital, for anesthesiologists, everyone that's included within that patient episode. And the time period goes 30 days before the episode, and then 90 days after the episode. Participating in TEAM is mandatory. They're making it mandatory for right now, 741 acute care hospitals across the country, and they've identified that within 188 which they talk about as core base statistical areas across the United States. And they're defining these core based areas as those that have historical spending patterns in some cases a little higher than others. Hospital characteristics, if some of them, let's say, have higher readmission rates than others, as well as those that have been involved in the CMS bundle payment process in the past. So you can see there's a lot of a lot of components to this. And there's a bunch of unknowns right now. And, interestingly enough, this does start on January 1st 2026. But they're using this last 2 years certainly as the look back period. So some of what we've already done, some of what has been captured within HCCs and so forth, are going to go into the risk calculation. The other point is that we just finished the comment period. So they had a comment period of a couple of months that concluded on June 10th. I have some preliminary information that was actually released by Dr. Mehmet Oz. He launched the or participated in the healthcare transformation task force, and they released comments a couple weeks ago on the status kind of clarifying a couple of the components of TEAM.
Well, here, joining me today is my colleague, Lucy Zielinski. Lucy is an absolute expert when it comes on HCC. And certified Coder. She's helped numerous organizations and a lot of their clinical documentation redesign, particularly in the ambulatory area. Lucy Welcome.
Lucy Zielinski:
Thanks, Dan, thanks for having me on.
Daniel Marino:
So, Lucy, when I when I look at the aspect of TEAM, there's 3 components that sort of resonate for me. One is the financial implication. Right? What does this mean for hospitals? You know. How do you identify that baseline? What's that overall impact to not just the hospitals, but to the surgeons. That's the 1st thing. The the second component is really around the quality. The performance measures right? So there's quality outcomes to it. There's performance outcomes that are associated with that. And then the 3rd is process right? It always comes down to process right? So what do the hospitals need to think about doing differently than they're already doing to maximize what the impacts going to be? So let's start with the financial piece. And maybe I could throw a 1st question out for you. I know that capturing the HCCs is critical, right? Because that's going to drive the risk level that's going to help to guide patients all the way through. Talk a little bit about what you've seen on the HCC capture related to TEAM.
Lucy Zielinski:
Sure, Dan, as you mentioned. That financial piece is very critical, is there are 3 tracks, and that quality adjustment could be as low as 15% reduction or plus 10 on the upside. And there's a calculation, they're calling target price. And the HCCs are part of that. So they're taking this regional price for certain MSDRG or HCPCS codes. They're multiplying times, this patient hospital specific adjustment. And that's where HCCs really go in. They do that. Look back. They're proposing taking a look back 6 months right and taking.
Daniel Marino:
If I can interrupt you for a second, so that so that 24 month periods is the baseline. But hospitals have an opportunity right now to go back in that 6 month period before January first, which is really going to be July first, right? And to make sure that all the HCCs are captured.
Lucy Zielinski:
Yes, so if they don't have a CDI program in place already, it is really critical that the providers, hospitals, providers, primary care physicians. The surgeons have a CDI program in place to capture the HCCs, and not only the HCCs, but that social risk score as well, just to make sure that that is being captured in this year in 2025.
Daniel Marino:
So I know from a finance standpoint, there's 3 tracks of participation, right? So those that are, let's say, mandated of the 741 hospitals, but do not have a track record of being involved in BPCI or any of the under bundle. They're going to enter into track one, and there's no downside risk. There's no lower performance year. It's basically the 1st year, just to kind of get your feet wet. But those that have a history are going to be entering into track 2 and track 3. And track 2, there are lower levels of risk with some opportunities for the upside. But then in track 3, that's the highest one, right? So they're going to you know, hospitals who have a history. They're going to automatically be in in Track 3. I've heard. And in some of the basic calculations that we've done, it's a pretty good swing it could be anywhere from, you know, 2 to 5,000 on the low side, to 2 to 5,000 on the high side. And basically, what that means is if the hospitals come in below, what the total cost of care is they're going to have to write a check versus if they were going to perform better, then obviously, then they're splitting the savings. Is that what you're seeing as well?
Lucy Zielinski:
Yeah, that's exactly right, Dan. So hospitals may take a hit as well as even the providers if that's being passed down to them.
Daniel Marino:
Well, and it's a good point, because you have to remember we're looking at total cost of care. And sometimes it's really difficult for hospital leaders to kind of get their arms around. Well, what is included on total cost of care. And it's really coming from the claims data, right? So if you're looking at what the costs are. 30 days prior to the episode, right? And the episode is the surgical episode versus the cost 90 days afterwards. That's that total cost of care. So I think it's going to be really important for hospitals to understand what their efficiencies or inefficiencies are. As we talk about perioperative in a few minutes, but more importantly than what the financial implications are to that total cost of care figure.
Lucy Zielinski:
Yes, and that's why I think hospitals should be doing an impact study to determine what kind of hit they may potentially take because of this.
Daniel Marino:
Yeah, absolutely, absolutely. Because, you know, as we talked about, it could be quite great. Let's move into a little bit of some of the performance assessments. So like with many of the value-based care programs, it's not just based on shared savings. It's not just based on improving costs and so forth. Quality and performance is a critical part of this right? So, although you may do really well on the cost and reducing the cost, if you don't hit your quality thresholds. You're going to be limited in realizing some of your potential savings. From what? Within the initial information that was released on TEAM, there were 3 areas, Lucy, that I've seen that are really critical on evaluating the performance. One is tracking all cause readmission rates right? And this is something. Hospitals have struggled with and have been struggling with for years. I think the second is around patient safety indicators. And then patient reported outcomes based on those episodes. And from what I'm seeing, they're really focusing a lot on the lower extremity joint replacement in terms of the patient outcomes there. So, Lucy, given those 3 assessments anything else, you would add?
Lucy Zielinski:
Yeah, Dan, so many as you know, many hospitals are already tracking those. I think what's important is that they tie them back to those episodes. And intentionally take that data and do an analysis to see how they're performing against those measures. And there's another thing that I thought of one of the other measures that many organizations track is the transitional care management visits the TCM visits that are occurred within 14 days post discharge. Although that's not part of this model, but that will provide many organizations, some insight into how they're doing.
Daniel Marino:
Yeah, that's a great point, because a lot of them, you know, I think transitional care management is now starting to pick up. And many of the hospitals have done a good job with discharge management, but not necessarily with transitional care management. But you know I can't help but think, Lucy, this has to start really in the pre-surgical evaluation, right? So it's going to be so important for these hospitals and the pre-surgical evaluation team to properly screen the patient, identify the risk level, code for it appropriately and document it appropriately. So it carries it all the way through the whole perioperative continuum. So by the time you do get to that transitions of care you have a sort of a patient, specific risk, focused care plan that can help transition that patient back to the home environment. And then you're able to manage, not just to the needs of the patient, the caregiver, but specific to the risk factors that are inherent in that patient.
Lucy Zielinski:
Absolutely, Dan. It goes back to what we said earlier that HCC must be captured. That's very important. In addition to that there needs to be a health related social needs screening. That's part of the model requirement. So beneficiaries really need to be screened for some of these domains. And here's where hospitals really need to understand the social determinants, because those determinants can really impact the outcome of the patient. So Hccs, performing the screenings, having that as part of the pre-surgical evaluation process is very key. In addition to that, even that care coordination is important. And I mean, I can share a personal story here regarding that.
Daniel Marino:
If you're just turning in today, I am Daniel Marino, and you're listening to value based care insights talking here today with Lucy Zielinski, and we're diving into the TEAM model that was recent released by CMS, it's the transforming episode accountability model that's going to impact 741 hospitals around the country. Yeah, Lucy, I know you've mentioned that before that that you have a personal story on how maybe patients or one hospital didn't necessarily do a great job on their pre-surgical evaluation, and it really caused some challenges. The patient, once the patient was released from the hospital and they got to the home environment. Maybe you could share a couple of those key points with us.
Lucy Zielinski:
Sure. Sure. So this was actually a real thing that happened to one of the neighbors here. She's a 67 year old female widow, living alone. Who is on a limited income and happens to be a diabetic, and she had knee surgery in an ASC. And was sent home that same day, as you know. That's what happens these days. She had some help in the home from others, but really not enough. And for a lot of reasons for physical therapy was delayed for over a week. She couldn't get around to ice her knee as it was directed. I think it was like every hour, or something like that. She ended up developing an infection. So then it was just a mess, and she tried getting into a rehab facility for physical therapy, for some treatment, for some because she didn't have the appropriate caregiver resources available to her, and it was denied. So, as you can imagine, Dan, her recovery period lasted longer than was anticipated, but even more, you know, unfortunately, it resulted in complications which resulted in her total cost of care, would it probably more than if she went to rehab.
Daniel Marino:
Did she go back to the hospital? Was she readmitted, or did she go to the ER for evaluation based on her infection?
Lucy Zielinski:
She went. She went to the ER then saw the orthopedic physicians. A few times they redid some stitches and some other treatment. So a lot of this, you know. As I heard this story, I thought to myself, this could have been prevented if there was this pre-surgical coordination of care plan developed early on to ask her those critical questions. Will you have the right care at home, right, and put a plan together.
Daniel Marino:
Absolutely. Well, as you know, we're working with hospitals around the country on this pre, this perioperative services value stream. And to your point, the critical component of that is the preoperative evaluation that has to occur with the patient and hospitals for years have focused on improving efficiency in the OR and that's important. We've done a lot of those types of engagements. But when you think about it from a value-based care perspective, and certainly in the impact of to TEAM. You have to think about the pre-evaluation or the pre-admission testing whatever you want to call it. You have to think about it differently. We have to focus on the risk levels of the patient and all of those elements like you, said the social, determinant pieces of it, whether they have the right support structure at home with the caregivers as well as then arms around or getting our focusing our attention on the comorbidities and a lot of the chronic diseases and so forth. If we can do that preoperatively, not only does it reduce, then, the fee for service components within the surgical episode right? Cutting down on the cancellation rates and all that other good stuff. But it really does drive the performance post-operatively in terms of being able to support the care plan. But, more importantly, as the patient transitions to home right, there is a focused care plan with the patient on how they need to recover, and it seems like a lot of that is missing.
Lucy Zielinski:
Yeah, one of the things, Dan, part of the model, the requirements is that a referral to a primary care physician. It's required before the patient is discharged, and that really promotes continuity of care and a good, solid, successful transition.
Daniel Marino:
Yeah, you're absolutely right. And that's a big change, too, because a lot of times when a patient goes in for surgery, it's the consult, or the surgeon right? That is, processing the pre off, and they're kind of managing the case. They may get it, you know. Communicate with the with the primary care physician, but not to the level that they're going to be mandated now, so they that has to be part of the preoperative program as well as then, the post, operative care and recovery and transition back to ambulatory.
Lucy Zielinski:
Absolutely, you talked about Dan, operational changes that need to happen. And that's definitely something that I would recommend is, forming, a really a work group that is not only involving that surgical service line, but a team from the clinical, the finance quality, analytics, care, management and even value based care components to assess. How. How does the healthcare organization succeed under this program?
Daniel Marino:
Yeah, you're absolutely right, I think, in order for hospitals to really understand how they need to evolve their overall procedural service related to these 5 episodes, if you will, you need to have a multi disciplinary team that's going to participate in it. And you know, and one thing I do want to make mention because we've worked on this. I'm really proud within, Lumina, that we have a lot of tools. So any of our listeners out there that are interested. We have a TEAM readiness assessment tool, which is great because it's something easily that organizations can start to look at. It looks at the financial component. It looks at the performance and quality component. And then it looks at the operational requirements that helps to understand areas of vulnerability and really where to focus attention. The other thing that I would be happy to share, and this is free, is our perioperative services value scorecard. The scorecard has been great Lucy. I mean, a lot of people can self evaluate and determine. Well, are they, you know? Are they strong, or are they struggling within preoperative services, or postoperative care, or the recovery piece. And the nice thing about that is, it measures it against benchmarks.
Lucy Zielinski:
Yeah, it's a great tool. Dan.
Daniel Marino:
Yeah. And I think the key is when you think about the assessments wrapping that into how you need to operationalize it right? How we need to then incorporate it into our performance drivers. And it starts with gathering the team. But I'll tell you the other piece that, and we talk about this all the time on this program. If you really want to make the change, you have to align the incentives right. And one of the things that I think will be coming out of this TEAM model is for organizations to think about how they can create a funds flow model, or some type of an incentive based shared savings component, that incorporates the surgeons. Obviously with the hospital post-acute. And even some of the hospital-based specialties like anesthesia which typically aren't involved in value-based care at all.
Lucy Zielinski:
Right? Right? So it's it's developing a model and it really educating them. So there is collaboration across the whole continuum. You know, one thought I had, Dan, is as this model expands care, coordination. As you know, a lot of these services are billable to Medicare, and they could provide an enhanced revenue stream to the organization, so that that some of that could then be distributed in an incentive-based model, depending on how, how the organization performs.
Daniel Marino:
Well, and that's a great point. Because when you think about that, if you're able to, if you have a robust presurgical evaluation process, and you're able to identify the risk conditions. And let's say the patients do have chronic diseases or comorbidities that could feed not only into your transition to care model which you're able to bill. You could also build CCM for that, or you can build PCM. For that. If it's really based off that single specialty which many Ortho practices are doing right now.
Lucy Zielinski:
Well, and Dan in my story earlier with that diabetic patient who had the knee replacement, I think what an opportunity! If she was receiving care management services her complications could have potentially been avoided because somebody would have been involved in care.
Daniel Marino:
Yeah, I absolutely. I absolutely agree with you. The other thing that I'm seeing, too, is there's a lot of technologies that are coming out right now. And the technologies really around AI, my personal opinion, it's really going to be a game changer for a lot of care management programs, and we're going to have on the show in another couple of weeks, Dr. Christian Pean. He is an orthopedic spine surgeon from Duke and he leads a technology called Revel AI. I've been really impressed with it, Lucy. It has an opportunity to aggregate a lot of data, social, determinant data claims, data and so forth. That helps to drive a lot of the risk activities pre-surgical. But that really then follows the care management process in support of the surgeons and then the hospital team, as they transition from the hospital arena back to the home environment. So I'm really excited about that one last question for you. When we think about the HCCs. And I know this is an area that's near and dear to your heart. When we think about the HCCs, how much of the documentation. How much of the of the of all of the restructuring in the pre-surgical evaluation? How much of that needs to be done? Right? So I mean, surgeons typically haven't done a good job of capturing it right? I mean, I would think if there's a place that hospitals should start right then and there it should be on identifying where they're at on their capture rate of their HCCs.
Lucy Zielinski:
Yes, and this is this is your technology strategy right? What kind of information is being shared with the surgeon? How is care being coordinated between the primary care physician, the pre-testing, the pre-OP clearance from the primary care physicians, all of that that whole process really requires the providers to capture those HCCs.
Daniel Marino:
Yeah.
Lucy Zielinski:
And that then would drive some of the target, pricing, too, in the TEAM model, which is, which is so critical.
Daniel Marino:
And the risk level. I think if there's 1 takeaway from our discussion today again, it gets back to that point where physicians, hospitals, they have to really focus on their providers, on the HCC capture rate. Well, Lucy, I want to thank you for joining today. This is this has been great. I'm excited for where this is going. I like all these value-based care programs. As I've said, time and time on the program. I really feel like value-based care and the changes that we're seeing. That's what's really going to help us continue to provide good quality care and reduce some of the costs, or at least slow the growth of costs. So I'm excited about the TEAM model.
Lucy Zielinski:
I am, too, Dan. I think this this model really aims to promote just better care and the overall, patient experience again. Going back to that story I gave. If we could change those stories for patients across the country, it's a movement in the right direction.
Daniel Marino:
Yeah, absolutely well, for any listeners out there that want to get in touch with you. Maybe. Can you give your email?
Lucy Zielinski:
Sure, it's Lzielinski@luminahp.com.
Daniel Marino:
And I think everybody knows mine dmarino@luminahp.com and I would encourage any of our listeners. Reach out, you know, especially if any of your hospitals are one of the 741 mandated TEAM hospitals reach out. Let's have a conversation. Happy to answer any questions, or, if anything just sort of brainstorm where you need to start. And then, you know, as we talked about here, we have a lot of tools, so there's no sense reinventing anything, I think, to be able to incorporate, some of these tools will help your team move a little bit faster. So I think with that said, thanks again, Lucy, for tuning in. I really appreciate it, and thank you for all of our listeners until our next insight, I am Daniel Marino, bringing you 30 min of value to your day. Take care.