NASS 2025 RECAP
Medicare TEAM Symposium: Navigating Bundled Payments for Spine Fusions
Jason Friedrich, MD
Editor in Chief University of Colorado School of Medicine Aurora, CO
The North American Spine Society (NASS) 2025 Annual Meeting featured a high-level symposium on Medicare’s Transforming Episode Accountability Model (TEAM). This mandatory bundled payment initiative, set to launch January 1, 2026, represents a shift in how spine fusion procedures will be reimbursed under traditional Medicare. Both curiosity and skepticism could be felt across the auditorium as the expert panel explored the policy’s design, implications, and strategies for success. This symposium was filled with high-yield information that can serve as an initial roadmap into TEAM. I encourage all interested readers to watch the full symposium via NASS Anytime.
What is TEAM?
Brook Martin, PhD, MPH (University of Utah Health), opened the session by outlining TEAM’s core principles. Bundled payments aim to curb cost variation in fee-for-service models by assigning a single payment for all services within a defined episode of care. Procedures included in TEAM include coronary artery bypass grafts, major bowel procedure, lower extremity joint replacement, surgical hip and femur fracture treatment, and spinal fusion.
For spine fusions, this means covering costs from the anchor surgery through 30 days post-discharge. Hospitals meeting target prices share in savings; those exceeding targets face repayment obligations. TEAM will run for five years, with downside risk commencing in 2027. For those less familiar with payment bundles, Table 1 provides some key concepts and definitions.
Table 1. Bundled Payment Models Key Concepts and Definitions1
Program Design and Risk Tracks
Over 700 hospitals across the U.S. will be assigned to one of three risk tracks3: Track 1 (upside-only risk), Track 2 (rural/safety-net hospitals with gradual two-sided risk), and Track 3 (full two-sided risk). Stop-loss and gain caps apply, limiting annual reconciliation swings to ±20%. Target prices are risk-adjusted and derive from three-year average spending, adjusted for geography, comorbidities, socioeconomic factors, and include a 2% policy reduction.
In other words, for hospitals to be successful within this program, they need to at least see a 2% cost reduction relative to their risk-adjusted target price or benchmark. Preliminary target prices should be shared with participating hospitals by December before the start of a performance calendar year and will be based on 3-year average Medicare spending across 9 census divisions, adjusted for local socioeconomics and medical comorbidities. Quality Composite Scores (QCS) can further adjust reconciliation by ±15%, though these measures are hospital-wide and not spine-specific.
For example, the proposed QCS for this first iteration of TEAM includes hospital-wide all cause readmissions, patient-reported outcome performance measures for hip and knee arthroplasties, CMS PSI 90 (specific patient safety indicators, such as pressure ulcers, falls, post-operative infections), and 30-day mortality. QCS will require spine surgical PRO reporting as early as 2027.
Scope of Bundles
TEAM encompasses 11 spine fusion bundles, categorized by cervical vs non-cervical, single vs multi-level (up to seven levels), and single-column vs combined anterior-posterior approaches. Exclusions include acute trauma, tumor, infection, and deformity cases, as defined by DRG (eg, 457, 458) and ICD-10 diagnoses. Each episode spans surgery through 30 days post-discharge, with mandatory PCP follow-up referrals at discharge to enhance continuity of care.
The bundled payment for a spinal fusion episode covers a comprehensive range of services: inpatient hospital services (anchor stay), physician services (post-operative specialists and primary care), outpatient therapy services, skilled nursing facility (SNF) services, home health services, clinical laboratory services, durable medical equipment (DME), Part B medications (drugs and biologicals), and hospice care. Waiver of the 3-day hospital stay before transfer to a SNF is available.
Pre-Policy Insights: Hospital and Cost Variability
Brian Karamian, MD (University of Utah Health), presented data comparing TEAM participants to non-participants. Selected TEAM hospitals skew larger, academic, and trauma-designated, with higher comorbidity burdens and costs. His retrospective analysis of Medicare claims (2016–2021) revealed striking cost variability: inpatient 30-day episode costs ranged from $45-175K at lower-volume centers. Higher volume centers had less cost variability. TEAM hospitals averaged $1,500-2,200 higher inpatient costs than peers, underscoring efficiency challenges ahead. Outpatient costs showed similar variability, albeit smaller absolute values. A concern is that more mature, high-volume, high-efficiency centers may struggle to meet performance benchmarks (ie, less room for improvement).
Complexity and Clinical Risk
Sohail Mirza, MD (Inova Fairfax Hospital), highlighted a national trend toward greater surgical complexity, driven by advances in navigation and robotics. His team developed an invasiveness index correlating procedural complexity with operative time, blood loss, and complications. Each additional unit of invasiveness raised complication risk by 7%. High-complexity cases carried 39% higher readmission risk and 54% higher overall complication risk.
Dr. Mirza cautioned that Medicare’s data collection limitations will hinder differentiation of high vs low-quality hospitals. In other words, he expects that cost will dominate TEAM’s performance metrics, as opposed to quality, complications, or other clinical outcomes.
Unintended Consequences and Lessons Learned
Grace Xiong, MD (Stanford Medicine), warned of potential unintended consequences of the TEAM spinal fusion bundles, drawing lessons from prior bundled models (eg, Bundle Payments for Care Improvement (BPCI) and Comprehensive Care for Joint Replacement (CJR)). For instance, under BPCI, some academic centers saw costs increase within spine fusion bundles (~$8K) due to a case mix shift towards more complexity, despite cost reduction with lower extremity arthroplasty bundles.
Challenges and failures with BPCI included practice maturity, program complexity (ie, greater case and surgeon heterogeneity), and community trends (eg, shifting of more complex and acute care to a smaller number of facilities). For TEAM, Dr. Xiong forecasts that coding choices (eg, radiculopathy versus scoliosis) may push cases into or out of TEAM bundles. Moreover, some surgical technique choices are likely to be altered within TEAM bundles, as two-column fusions or custom implants can raise anchor costs.
Mandatory bundles may also slow outpatient surgical adoption, as hospitals fear jeopardizing inpatient and outpatient performance metrics. Hospitals may want to hang on to some more straightforward cases on the inpatient side to avoid risking a major case mix shift and want to do a short-stay inpatient as opposed to outpatient to avoid the overnight stay busting outpatient targets. While TEAM has attempted to adjust performance metrics to patient comorbidities, it still seems likely that risk adjustment gaming will occur between hospital systems in each community.
Finally, there is likely to be a delay in recalibration of target prices each year relative to when practice decisions need to be made, further complicating creation of an annual strategy.
Implementation Strategies for Success
Dr. Xiong provided several takeaways before giving the microphone over to Serena Hu, MD (Stanford Medicine). In addition to understanding DRGs, bundle exclusions, and the potential downsides of hastily shifting cases to outpatient, she recommends everyone also get comfortable with thorough risk documentation, especially noting the HCCs relevant to spine fusion pricing (Table 2).
Dr. Hu focused her time on the most practical approaches to cost-savings: preop risk optimization and discharging home. She emphasized that discharge-to-home is the single most impactful lever for cost control. Other primary cost drivers may be more difficult to modify initially, especially in mature health systems. Preop risk modification (smoking cessation, diabetes control, anemia correction), cardiopulmonary evaluation (pre-op anesthesia clinic), nutrition and osteoporosis management, ERAS compliance, and proactive discharge planning are critical.
Dr. Hu recommends a strong emphasis on proactive care coordination: case management, home needs assessment, pre-arranged DME, designated postop caregiver to receive the primary education and serve as a health care liaison at home, well-communicated pain/mobility plan with consistent messaging, scheduled postop phone calls and early clinic follow-up.
Perhaps more challenging, but equally critical is the relationship building and collaboration with SNFs, rehab centers, and home health agencies to align incentives within the bundle and shorten stays. While post-acute care is usually a smaller percentage of total costs relative to the anchor stay, it offers the most opportunities for cost reductions, at least early in the TEAM program. Dr. Hu aptly summarized that it takes a village to care for patients and to thrive under TEAM.
Table 2. High Impact HCC Categories for TEAM Spinal Fusion Bundle2
Rural Hospital Realities
Each community will face different challenges under TEAM. Kevin McGuire, MD, offered a candid view from Dartmouth-Hitchcock Medical Center. Rural hospitals face unique hurdles: limited SNF/rehab capacity, broad catchment area, older patient populations, and workforce shortages. Swing beds in critical access hospitals—five times costlier than SNFs—drive episode expenses. Despite Track 2’s softer risk profile, Dr. McGuire’s models predict hitting stop-loss caps.
Strategic options include investing in perioperative hospitalist teams, redistributing complexity (eg, shifting moderate complexity to non-TEAM community hospitals), and leveraging telehealth for PT and nursing visits. He left the audience with an investment dilemma: why invest in infrastructure if the stop-loss will cap losses? He later concluded that investments are probably worthwhile because more bundles are coming, starting now allows investments to be spread over more years, and the care coordination goals are likely to be meaningful gains for patients.
Future Outlook and Advocacy
Panelists agreed that TEAM heralds a broader CMS push toward mandatory bundles and we will likely see patient-reported outcome mandates for spine within five years. Spine-specific quality metrics remain absent, raising concerns about stinting or jockeying for higher reward cases between health systems. Audience members voiced their concerns about heterogeneity of spine patients within a given DRG and ICD-10 codes and difficulty optimizing risk adjustments.
There is also risk in primarily looking for “short-term” wins, as opposed to providing the patient their “last” spine surgery even if costs more in the short-term. With these concerns in mind, the panel agreed that surgeons and industry must collaborate to generate evidence supporting high-value technologies and advocate for policies recognizing long-term outcomes. In his quiet but powerful tone, Dr. Mirza succinctly concluded that cost containment is inevitable, and our challenge is proving value.
Conclusion
The symposium underscored both TEAM’s promise and challenges. Success will hinge on meticulous coding, risk documentation, care standardization, and coordinated post-acute care strategies. For spine surgeons and hospitals, the next 12 months represent a window to prepare for a payment paradigm that prioritizes cost awareness, and efficiency, hopefully without compromising quality.
Figure 1. US Map of TEAM participants. Courtesy of Brook Martin, PhD, MPH.
