CMS Finalizes Mandatory Episode-based APM for Hospitals

As part of the fiscal year (FY) 2025 Hospital Inpatient Prospective Payment System (IPPS) final rule, CMS finalized a new, mandatory alternative payment model (APM) that would apply to certain hospitals when episodes are triggered by a performance of one of the following procedures at that hospital:

• Coronary Artery Bypass Grafting (CABG)
• Lower Extremity Joint Replacement (LEJR)
• Surgical Hip and Femur Fracture Treatment (SHFFT);
• Spinal Fusion; and
• Major Bowel Procedure

While these episodes do not implicate electrophysiology services, it is worth noting that this model represents an effort by CMS to implement a wide-scale mandatory APM. HRS will monitor any efforts to expand the number and types of episodes in the model.

As part of the Transforming Episode Accountability Model (TEAM), nearly all hospitals in the selected geographic areas will be required to participate. The model has a finalized initial performance year of 2026 and will run for five years, although stakeholder concern about the mandatory nature of the model may result in advocacy efforts to convert to a “voluntary” or “opt out” model or delay the start date.

The Agency has provided more details on the TEAM web page.