123 TEAM wasfinalized in thefiscal year (FY) 2025 Hospital Inpatient Prospective Payment System (IPPS)final rule, CMS-1808-F.Unless otherwise noted, all information contained here describing TEAM is drawn from thatfinal rule, which wasreleased on August 1, 2024.Who is required to participate in TEAM and how will they beimpacted?Mandatory model and participationCMS has tested a variety of episode-based models—the majority of which have been voluntary. Voluntary models areeasier to implement and moreflexible because they can be implemented without rulemaking; however, they are harderto evaluate due to selection bias and provider attrition. Mandatory models can help prevent (or at least minimize theimpact of) these issues, while furthering CMS’s accountable care participation goals. Using the mandatory CJR model asa foundation, CMS is expanding the model’s geographic scope with a focus on CBSAs. This structure results in selectionof a broader set of participants who are more representative of the U.S. population. CBSAs include both micropolitanand metropolitan statistical areas (mSAs and MSAs, respectively) and reflect urban core populations of at least 10,000,whereas in CJR, CMS relied on MSAs, which reflect urban core populations of at least 50,000. In both models, hospitalslocated in the state of Maryland are excluded.To select hospitals for participation in TEAM, CBSAs were stratified into 18 cohorts based on the following criteria andassigned a selection percentage:Average historical episode spendingNumber of hospitalsNumber of safety net hospitals4https://www.milliman.com/en/insight/next-generation-medicare-bundled-payments-considerations-teamPast exposure to CMS bundled payment models, including the BPCI, CJR, and BPCI Advanced models This stratification methodology allowed CMS to “oversample CBSAs with low past exposure to CMS’ bundled paymentmodels and CBSAs with a high number of safety net hospitals” (pg.69683). Each CBSA had a 20% to 50% chance ofselection, which resulted in 188 CBSAs (23.4% of the 803 eligible CBSAs) being selected for participation in TEAM (pg.69704).CMS is requiring all ACHs paid under the inpatient prospective payment system (IPPS) within the selected CBSAs toparticipate, including safety net, rural, Medicare-dependent, sole community, and essential access care hospitals.Historically, these types of hospitals have participated in value-based payment arrangements at lower rates due to a lackof resources or concern with taking on substantial financial risk (pp. 69780, 69794).As one goal of TEAM is to expand the reach of value-based care to providers that have yet to participate, CMS hasacknowledged that TEAM participants will need time to adapt their infrastructures and become familiar with thecomponents of the model. Therefore, CMS is providing a one-year glide path that will ease participants into taking ondownside financial risk in TEAM, while allowing certain eligible participants to opt for limited downside financial risk forthe entire model.All TEAM participants will have the option to choose between Tracks 1 and 3 in the first performance year (PY), andeligible participants will have the option to choose between Tracks 2 and 3 throughout the rest of the program, asillustrated in Figure 1. Recognizing the financial barriers and unique care priorities faced by safety net hospitals, in theIPPS final rule for 2025, CMS adjusted the track options for these hospitals and is now allowing them to elect to remainin Track 1 through PY3.Figure 1: TEAM participation tracksTrack 1Track 2Track 3Eligible Participant TypesPY1: All participantsPY2-3: Safety net hospitalsonlyPY4-5: NonePY1: NonePY2-5: Safety net, rural,Medicare-dependent, solecommunity, andessential access care hospitalsonlyPY1-5: AllparticipantsFinancial RiskUpsideLimited Two-SidedTwo-SidedStop Gain/Loss10%5%20%Composite Quality Score (CQS) -PositiveUp to 10%Up to 10%Up to 10%CQS - NegativeN/AUp to 15%Up to 10%Note: See the Quality Measures and Reconciliations section below for more information on the how the quality measures and stop gain/lossare calculated and are used to adjust TEAM payments/repayments.Participants are required to notify CMS of their requested track prior to the start of a PY, with the default tracks beingTrack 1 for PY1 and Track 3 for PYs 2 to 5. All participation tracks will qualify as a Merit-Based Incentive Payment System(MIPS) APM under the Quality Payment Program, and Tracks 2 and 3 will also qualify as an Advanced APM.In addition to those ACHs required to participate, CMS is also offering a one-time, voluntary opt-in opportunity for BPCIAdvanced or CJR ACHs that remain participants until thefinal day of the respective program. ACHs eligible to voluntarilyopt-in to TEAM had until January 31, 2025 to notify CMS of their intent to participate.Why this matters:CMS has mandated participation in more geographic regions under TEAM than in CJR, so the modelwill impact more ACHs, both those familiar and