Hospital executives are facing an urgent imperative: make sense of their claims data to thrive under the Centers for Medicare & Medicaid Services (CMS) Transforming Episode Accountability Model (TEAM). This mandatory five-year bundled payment model holds participating hospitals financially accountable for the total cost and quality of care for certain episodes—from the initial procedure through post-discharge recovery. Unnecessary care variation resulting in unpredictable costs and avoidable complications now translates directly into financial risk.
If a hospital selected Track 1 in Performance Year 1 (PY1), it will be eligible for a 10% upside (financial incentive) only, based on cumulative episode target prices. Beginning in Performance Year 2 (PY2) in 2027, however, most TEAM hospitals will be required to participate in Track 3, which includes both 20% upside and downside (financial penalty) risk. This shift places many participating hospitals at risk for millions of dollars in potential financial losses.
Is Your Hospital at Risk?
Has your organization evaluated its potential downside exposure heading into PY2? To assess financial risk, TEAM hospitals must analyze baseline episodic claims data from January 2022 through June 2024. This analysis reveals whether total costs, based on episode volume, exceed CMS target prices.
More importantly, the claims data reflects the total expense of care, which is shaped by factors beyond workflow, including supply costs. The analysis of this data reveals improvement opportunities—highlighting variation patterns, utilization trends, and the drivers of cost, so hospitals can clearly see where cost variation exists.
By using both baseline and PY1 claims data, hospitals can prioritize high impact areas and, when needed, pursue a Phase II effort that moves from insight to action by establishing multidisciplinary governance, defining and prioritizing targeted interventions across the episode of care, and providing structured implementation support to execute, monitor, and sustain operational and workflow improvements.
Top Five Barriers to Actionable Insights from Claims Data
Hospitals face several challenges when attempting to transform claims data into strategic intelligence:
- Data Fragmentation Across Systems: Claims data is often dispersed across multiple care settings, making it difficult to consolidate and analyze comprehensively.
- Delayed Data Availability: Time lags in claims analysis hinder timely access to insights, limiting the ability to respond proactively to emerging trends.
- Resource Constraints and Analytical Capacity: Many hospitals lack the internal analytics expertise or capacity to convert raw claims data into decision-ready intelligence.
- Complexity in Identifying Actionable Insights: Without advanced analytics or intuitive tools, hospital leaders are challenged to detect patterns such as high-cost outliers, readmission trends, or inefficiencies in care delivery.
- Limited Stakeholder Engagement: Presenting claims data in a format that is meaningful and actionable for physicians, care teams, and post-acute partners requires tailored communication and user-friendly visualization tools.
Claims Data as a Strategic Asset with the PYA TEAM Dashboard
PYA’s TEAM Dashboard is built to address the challenges of the TEAM model. It transforms raw claims data into a strategic asset, delivering a comprehensive, 360-degree view of each episode of care. The dashboard highlights what matters most—from cost drivers by care setting to physician performance and post-acute outcomes—empowering leaders to make informed, timely decisions.
Learn more and watch a demonstration about the PYA TEAM Dashboard:
Hospitals that succeed under TEAM will not be those that react to financial reconciliation after the fact. Successful hospitals will be the ones that analyze data, proactively manage episodes, improve outcomes, reduce costs, and capture earned savings.
PYA has been a trusted partner in episodic payment modeling since the inception of CMS’ Bundled Payments for Care Improvement (BPCI) program in 2013. Our experts are available to help your organization use data to drive decisions and improve your financial performance.
