By Adam Turteltaub

With a rising focus on value-based care, and a new program seeking to make the approach mandatory, we spoke with Ed White (LinkedIn), Partner at Nelson Mullins.

Previous efforts to move toward value-based models, such as Accountable Care Organizations (ACOs), faced significant barriers due to regulatory frameworks like the Stark Law and Anti-Kickback Statute. These laws were designed to prevent financial incentives from influencing medical decisions, but they also limited the ability of hospitals and physicians to collaborate in ways necessary for effective value-based care implementation.

Recognizing these constraints, CMS and the Office of Inspector General (OIG) collaborated in 2020 to issue new regulations aimed at facilitating the transition to value-based care.

The next step in the transition is the new Transforming Episode Accountability Model or TEAM program, which will become mandatory in 2026. This program includes 740 hospitals across the country and targets five specific surgical procedures. Participating hospitals must coordinate care with a range of providers—including specialists, primary care physicians, labs, durable medical equipment (DME) providers, hospice agencies, and others.

The TEAM program is designed to last for five years, during which time hospitals are responsible for ensuring that patients are connected to appropriate post-discharge care, including follow-up with primary care providers. The goal is to reduce complications, avoid emergency room readmissions, and promote better health outcomes—all while keeping costs below a CMS-established target price.

To drive efficiency, the TEAM program introduces three financial risk “tracks”:

Upside-only track – Hospitals can earn shared savings if costs come in below the target price.

Moderate risk (upside/downside) track – Hospitals can either earn savings or incur penalties depending on performance.

Full-risk track – This track will offer both greater risks and rewards.

According to industry consultants, two-thirds of participating hospitals are expected to lose money in the early phases of the TEAM program.

Hospitals must rethink their compliance, care coordination, and partnership strategies in the wake of these changes. Listen in to learn more about what this all means for your compliance program both today and in the future.