How Hospitals Can Make TEAM Work

Brian Drozdowicz

The next major step in the CMS campaign to enroll traditional Medicare beneficiaries in accountable care arrangements raises the stakes significantly for hospitals.

Beginning next year, approximately 750 hospitals in selected core base statistical areas around the U.S. will be required to participate in CMS’s five-year Transforming Episode Accountability Model (TEAM) program. These hospitals will be responsible for the costs and outcomes of fee-for-service Medicare beneficiaries for 30 days after they receive one of five high-volume surgical procedures: lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure.

These account for about 15% of hospitals’ Medicare revenue and missing the target price will hurt their bottom lines.

Value-based care and TEAM

Enrollment in value-based care (VBC) programs with financial penalties for failure to control spending is growing. The share of healthcare payments from risk-bearing VBC programs where providers could lose revenue if they do not meet quality or cost goals reached 28.5% in 2023, up from 12.5% in 2019.

Specifically, TEAM is designed to lower some of the $47.6 billion CMS spends each year on hospital readmissions within 30 days of discharge.

Here's how TEAM could affect hospital finances.

• Hospitals can lose revenue beginning in the second year of the program. Like other bundled payment programs at CMS, if patient expenditures exceed payment for the episode, the hospitals will pay for the excess.
• Cost limits or “pricing” are based on a hospital’s geographic region, not its individual historical costs. Large hospitals in more expensive metropolitan areas participating in TEAM could be disadvantaged, even if they consistently deliver better outcomes.

One estimate says hospitals could lose as much as $1,750 per episode of care if unexpected costs occur, such as patients being readmitted within 30 days. Multiplied by tens of thousands of procedures a year, unprepared hospitals stand to lose millions of dollars annually.

However, hospitals that succeed in TEAM will be better situated for future VBC mandates. Eventually, as VBC continues to spread to private pay, we can expect it to become more common than the traditional fee-for-service model.

Whether or not they participate in TEAM, healthcare systems that prepare now for VBC models will benefit. For most hospitals, that will require taking a more proactive approach to care, one that requires not just additional data to inform early interventions but also more reliable insights automatically presented to clinicians when they need them. This preventive care is key to reducing readmissions.

Improving post-acute care

One of the pending challenges for TEAM participants is that much of the care that determines whether a patient is readmitted takes place outside their walls. After their surgical procedures, many patients will be transferred to a post-acute care (PAC) network of skilled nursing facilities (SNF) and other providers. In fact, between 21% and 53% of spending associated with the TEAM program’s designated procedures occurs after patients leave hospitals, according to consulting firm ATI Advisory.

Because SNFs and other PAC providers bear most of the responsibility of preventing costly hospital readmissions, it would benefit hospitals greatly if their PAC managers had continuous visibility into patients’ health status, trajectories, and vulnerabilities during post-acute admissions.

Unfortunately, the methods most hospitals use to monitor the health and care of their patients in PAC facilities are out of date by today’s standards and insufficient for VBC programs. Patients are usually transferred with a stack of paper forms and other documentation from the hospital for clinicians at the SNF to sort through, interpret and enter into their electronic health records (EHRs). As patients recover and rehabilitate, hospital and PAC facility clinicians still exchange updates mostly via fax or phone.

Inconsistent and inefficient care coordination and collaboration caused by poor handoffs and documentation raise the risk of post-operative complications and adverse events going undetected until the patient needs emergency care and rehospitalization. Both outcomes would likely drive episode costs over TEAM pricing limits and penalize hospitals.

Illuminating PAC

Hospital leaders and clinicians often refer to this lack of visibility into their patients’ PAC as the “black hole.” To illuminate this danger, hospitals and health systems have overhauled post-acute care monitoring protocols by using real-time and easily accessible data and care collaboration tools.

These technologies connect the hospital and PAC facility EHRs, even for facilities that hospitals might consider to be out of network. Using the hospital’s EHR, care managers can track each patient’s journey, regardless of the PAC facility’s staffing levels or availability.

These same tools can accurately assess the patients’ likelihood of hospital readmission within seven or 30 days through algorithmic risk scores based on data from medications, therapy notes, lab results, progress notes and vital signs. The score lets care managers identify higher-risk patients and intervene before an emergency department visit or rehospitalization is required, significantly increasing an episode’s total costs.

Employing a connected, data-driven PAC management strategy helps hospitals control episode costs by identifying and building a network around facilities that share their commitment to quality and efficiency. For example, hospitals can create scorecards based on key performance metrics such as 30-day readmission rates, transfer rates, and length of stay. Furthermore, hospitals can track and compare PAC facilities in their networks based on quality metrics from CMS, health inspection data, staffing performance, rehospitalization and ED visit rates.

Finding the right teammates

As hospitals look for help to address the TEAM mandate, they should:

• Find partners with broad collaboration networks that can offer patient visibility in PAC settings to control costs and improve outcomes.
• Look for advisors with a track record of helping hospitals reduce lost reimbursements, lower avoidable readmissions and penalties, and improve patient satisfaction.
• Deploy technology that significantly reduces or eliminates manual data management activities in favor of easily interpreted, actionable guidance, such as identifying patients at highest risk for readmission and ranking PAC providers.

Provider organizations, which rely on CMS for nearly half or more of their revenues, should recognize the opportunity presented in TEAM to prepare and equip their organizations for the VBC future.  The proactive care strategy and workflows they adopt will support long-term sustainability while improving patient outcomes and experiences.

Brian Drozdowicz is senior vice president and general manager of Acute and Payer markets for PointClickCare.