CMS TEAM Model: What It Means for Providers and ACOs

The CMS TEAM Model (Transforming Episode Accountability Models) establishes fixed prices for specific conditions. CMS determines what treatment should cost for each episode. Providers manage care within that predetermined price. If spending stays below the target, providers share in the savings. If spending exceeds the target, providers absorb the difference. Quality performance is a requirement for any financial arrangement. For ACOs and health systems, the TEAM Model creates direct financial accountability. For smaller organizations, the operational demands and capital requirements make participation impractical.

What is the CMS TEAM Model?

CMS establishes a fixed price for treating specific high-cost conditions like joint replacement, heart failure, and stroke. Each condition has a target cost for the full treatment episode.

Providers who participate in the model accept financial accountability for managing care within that price target. When spending stays below the target, providers receive shared savings. When spending exceeds the target, providers cover the overage. Quality standards must be met to qualify for any savings arrangement.

The Difference from Traditional Medicare

Traditional Medicare reimburses providers for individual services delivered. Each office visit, diagnostic test, and procedure generates a particular payment. Revenue increases with the number of services provided.

The TEAM Model operates on a single fixed payment for the entire treatment episode. One payment covers all costs associated with managing that condition from beginning to end. Efficiency becomes the primary driver of financial performance rather than the volume of services.

Who Is Eligible?

Participation requires the ability to manage patient populations across numerous care settings and track costs throughout an entire episode. This demands data systems, care coordination infrastructure, and sufficient financial reserves to cover potential losses. ACOs and health systems typically possess these capabilities. Solo practices generally do not.

CMS limits the number of available slots and awards participation based on organizational capacity and demonstrated readiness to manage financial risk.

What Are the Financial Risks and Benefits?

The TEAM Model creates direct financial accountability for providers. Organizations that manage episodes efficiently earn shared savings. Organizations that exceed target prices absorb the financial losses.

The financial implications include:

• Shared savings accrue to organizations that operate below the episode target price
• Financial losses fall on organizations that exceed the established target
• Traditional volume-based revenue streams are eliminated
• Quality performance metrics directly determine financial results
• Data visibility across episodes becomes a competitive advantage
• Care coordination improvements generate better clinical outcomes

Why Providers Should Participate

The healthcare market is moving toward value. The TEAM Model CMS is one expression of that shift. Organizations that don't learn to operate in value-based models will struggle. TEAM Model participation gives you real experience managing financial risk.

It also gives you data. You learn which interventions work. Where costs hide. How to coordinate care across settings. That knowledge becomes a competitive advantage as more payment models shift toward accountability.

Takeaway

Persivia's platform helps you track episodes, manage costs, and hit quality targets under the CMS TEAM Model. See where spending occurs. Identify which patients are at risk. Coordinate care across your providers before costs spiral.

Visit Persivia to see how health systems use Persivia to succeed in TEAM Model CMS arrangements.