Title 42—Public Health--Volume 1
PART 512—STANDARD PROVISIONS FOR MANDATORY INNOVATION CENTER MODELS AND SPECIFIC PROVISIONS FOR THE RADIATION ONCOLOGY MODEL AND THE END-STAGE RENAL DISEASE TREATMENT CHOICES MODEL
§ 512.426   Efficiency domain.
(a) General. For each PY, CMS assesses each IOTA participant on the metric described in paragraph (b) of this section to determine the IOTA participant's score for the efficiency domain.
(b) Metric included in the efficiency domain. For each PY, CMS assesses the IOTA participant on the following metric:
(1) Organ-offer acceptance rate ratio. For each PY, CMS calculates the organ-offer acceptance rate ratio by dividing the number of kidneys the IOTA participant accepted by the risk-adjusted number of expected organ-offer acceptances using SRTR's methodology as described in equation 1 to paragraph (b)(1) introductory text of this section.
(i) CMS uses both of the following:
(A) SRTR data to calculate the organ-offer acceptance rate ratio.
(B) SRTR's adult kidney model strata risk-adjustment methodology and most available set of coefficients to calculate the number of expected organ-offer acceptances.
(ii) CMS includes all of the following kidney offers when calculating the organ-offer acceptance rate ratio for the IOTA participant:
(A) Offers that are ultimately accepted and transplanted.
(B) Offers to candidates on a single organ waitlist (except for kidney/pancreas candidates that are also listed for kidney alone).
(iii) CMS excludes the following kidney offers when calculating the organ-offer acceptance rate:
(A) Offers with multiple match runs from the same donor combined and duplicate offers.
(B) Offers with no match run acceptances.
(C) Offers that occurred after the last acceptance in a match run.
(D) Offers with a missing or bypassed response.
(E) Offers to multi-organ candidates (except for kidney/pancreas candidates that are also listed for kidney alone).
(c) Efficiency domain scoring. For each PY, CMS awards the IOTA participant 0 to 20 points for its performance in the efficiency domain.
(1) General. CMS determines the IOTA participant's score for the efficiency domain for each PY by taking the IOTA participant's score for the organ offer acceptance rate ratio, as described under paragraph (c)(2) of this section. This number is the IOTA participant's score for the efficiency domain for the PY.
(2) Scoring for organ offer acceptance rate ratio. CMS calculates the IOTA participant's achievement score, as described in paragraph (c)(2)(i) of this section, and improvement score, as described under paragraph (c)(2)(ii) of this section, for the organ offer acceptance rate ratio, compares the IOTA participant's achievement score and improvement score and awards to the IOTA participant the points that correspond to the higher score.
(i) Achievement scoring. CMS calculates the IOTA participant's achievement score based on the IOTA participant's performance on organ offer acceptance rate ratio relative to national ranking, including all eligible kidney transplant hospitals, using the scoring methodology described in table 1 to paragraph (c)(1)(i) of this section.
(ii) Improvement scoring. CMS compares the IOTA participant's organ offer acceptance rate ratio during the PY, calculated as described under paragraph (c)(1)(i) of this section, to the IOTA participant's improvement benchmark rate, calculated as described under paragraph (c)(1)(ii)(A) of this section.
(A) Improvement benchmark rate. CMS calculates an improvement benchmark rate for the IOTA participant. To determine an IOTA participant's improvement benchmark rate for a given PY, CMS multiplies an IOTA participant's organ offer acceptance rate ratio during the third baseline year by 120 percent.
(B) Improvement score calculation. For each PY, CMS uses the following methodology to determine each IOTA participant's improvement score on the organ offer acceptance rate ratio:
( 1 ) If the IOTA participant's organ-offer acceptance rate ratio is greater than or equal to the improvement benchmark rate, CMS awards the IOTA participant 15 points in the efficiency domain.
( 2 ) If the IOTA participant's organ offer acceptance rate ratio is equal to or less than the IOTA participant's organ-offer acceptance rate ratio in the third baseline year for that respective PY, CMS awards the IOTA participant 0 points in the efficiency domain.
( 3 ) If the IOTA participant's organ offer acceptance rate ratio is greater than the IOTA participant's organ-offer acceptance rate ratio in the third baseline year for that respective PY but less than the improvement benchmark rate, CMS uses the following equation:
§ 512.428   Quality domain.
(a) General. For each PY, CMS assesses each IOTA participant on the metric described under paragraph (b)(1) of this section to determine the IOTA participant's quality domain score, as described under paragraphs (c) through (e) of this section, for the quality domain.
(b) Metrics included in the quality domain. For each PY, CMS assesses each IOTA participant using the following quality metrics:
(1) Post-transplant graft survival. For each PY, CMS calculates an IOTA participant's composite graft survival rate by dividing the cumulative number of all functioning kidney grafts for the IOTA participant's IOTA transplant patients by the cumulative number of all kidney transplants performed by the IOTA participant during the first PY and all subsequent PYs on patients 18 years or older at the time of the transplant, as described in equation 1 to paragraph (b)(1) introductory text of this section.
(i) For the first PY, CMS calculates the IOTA participant's composite graft survival rate based solely on the number of functioning grafts furnished to IOTA transplant patients during that PY and the number of completed kidney transplants during that PY, as described in paragraph (b)(1) of this section.
(ii) For all subsequent PYs, CMS calculates the IOTA participant's cumulative composite graft survival rate using the same calculation methodology described in paragraph (b)(1) of this section.
(iii) CMS excludes the following from the numerator when calculating the composite graft survival rate:
(A) Graft failure, based on OPTN adult kidney transplant recipient follow-up forms for all completed kidney transplants to determine failed grafts as defined by SRTR.
(B) Re-transplant.
(C) Death.
(D) Patients who are under the age of 18 years of age at the time of the kidney transplant.
(E) Offers to multi-organ candidates (except for kidney/pancreas candidates that are also listed for kidney alone).
(iv)(A) When calculating the composite graft survival rate, CMS only includes kidney transplants for patients who are 18 years of age and older at the time of the kidney transplant in the number of kidney transplants performed by the IOTA participant during each PY in the denominator.
(B) CMS identifies kidney transplants performed by the IOTA participant using OPTN data, regardless of payer, and Medicare claims data.
(2)-(3) [Reserved]
(c) Quality domain scoring. For each PY, CMS awards the IOTA participant zero to 20 points for the IOTA participant's performance in the quality domain, in accordance with the following:
(1) For composite graft survival rate, as described under paragraph (d) of this section, the IOTA participant may receive up to 20 points.
(2) [Reserved]
(d) Composite graft survival rate scoring. CMS awards points to the IOTA participant based on the IOTA participant's performance on the composite graft survival rate, as described in paragraph (b)(1) of this section, ranked nationally, inclusive of all eligible kidney transplant hospitals. CMS awards points to the IOTA participant for composite graft survival rate as described in table 1 to paragraph (d) of this section:
§ 512.430   Upside risk payment, downside risk payment, and neutral zone.
(a) General. CMS determines if an IOTA participant qualifies for an upside risk payment, downside risk payment, or the neutral zone for each PY based on the IOTA participant's final performance score, in accordance with paragraphs (b)(1) through (3) of this section.
(b) Upside risk payment, neutral zone, and downside risk payment calculation methodology —(1) Upside risk payment calculation methodology. If in PYs 1-6 the IOTA participant's final performance score is 60 points or above, CMS calculates the IOTA participant's upside risk payment as follows:
(i) Subtracts 60 from the IOTA participant's final performance score.
(ii) Divides the amount resulting from the calculation in paragraph (b)(1)(i) of this section by 40.
(iii) Multiplies the amount resulting from the calculation in paragraph (b)(1)(ii) of this section by $15,000.
(iv) Multiplies the amount resulting from the calculation in paragraph (b)(1)(iii) of this section by the total number of Medicare kidney transplants performed by the IOTA participant during the PY.
(2) Neutral zone. (i) For PY 1, an IOTA participant with a final performance score below 60 points qualifies for the neutral zone and neither owes a downside risk payment to CMS nor receives an upside risk payment from CMS.
(ii) For PYs 2 through 6, if an IOTA participant's final performance is between 41 to 59 points (inclusive), the IOTA participant qualifies for the neutral zone.
(3) Downside risk payment calculation methodology. If an IOTA participant is at or below 40 points in PYs 1 through 6, the IOTA participant qualifies for a downside risk payment. The downside risk payment is calculated as follows:
(i) For PY 1, this paragraph does not apply, and the IOTA participant does not owe a downside risk payment to CMS.
(ii) For PYs 2 through 6, CMS calculates the IOTA participant's downside risk payment as follows:
(A) Subtracts the IOTA participant's final performance score from 40.
(B) Divides the amount resulting from the calculation in paragraph (b)(3)(ii)(A) of this section by 40.
(C) Multiplies the amount resulting from the calculation in paragraph (b)(3)(ii)(B) of this section by $2,000.
(D) Multiplies the amount resulting from the calculation in paragraph (b)(3)(ii)(C) of this section by the total number of Medicare kidney transplants performed by the IOTA participant during the PY to calculate the amount of the IOTA participant's downside risk payment.
(c) [Reserved]
(d) Upside risk payment and downside risk payment timeline. (1) CMS conducts and calculates preliminary performance assessment and payment calculations at least 3 to 6 months after the end of each PY.
(2) CMS notifies the IOTA participant of their preliminary performance assessment and payment calculations in a form and manner determined by CMS at least 5 to 9 months after the end of each PY.
(3) CMS gives IOTA participants 30 days to review preliminary performance assessment and payment calculations and request targeted reviews under § 512.434.
(4) CMS notifies the IOTA participant of their final performance score and any associated upside risk payment or downside risk payment at least 30 days after notifying the IOTA participant of their preliminary performance assessment and payment calculations.
(5) Upside risk payment. After CMS notifies the IOTA participant of their final performance score and any associated upside risk payment, and by a date determined by CMS, CMS issues the upside risk payment to the tax identification number (TIN) on file for the IOTA participant in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS).
(6) Downside risk payment. After CMS notifies the IOTA participant of their final performance score and any associated downside risk payment and by a date determined by CMS, CMS issues a demand letter to the TIN on file for the IOTA participant in PECOS for any downside risk payment owed to CMS.
(i) CMS includes all of the following details in the demand letter:
(A) IOTA participant performance in the model.
(B) Amount of downside risk payment owed to CMS by the IOTA participant.
(C) How the IOTA participant may make payments to CMS.
(ii) The IOTA participant must pay the downside risk payment to CMS in a single payment at least 60 days after the date which the demand letter is issued.
§ 512.434   Targeted review.
(a) General. Subject to the limitations on review in paragraph (c) of this section, an IOTA participant may submit a targeted review request for one or more calculations made, and issued by, CMS within the preliminary performance assessment and payment calculations, if either of the following occur:
(1) The IOTA participant believes an error occurred in calculations due to data quality or other issues.
(2) The IOTA participant believes an error occurred in calculations due to misapplication of methodology.
(b) Requirements. The request must satisfy the following criteria:
(1) Be submitted within 30 days, or another time period as specified by CMS, of receiving its preliminary performance assessment and payment calculations from CMS.
(2) Include supporting information in a form and manner as specified by CMS.
(c) Limitations on review. (1) CMS does not provide IOTA participants the ability to dispute the policy or methodology, as the targeted review process would be limited to the dispute of calculations. CMS would not consider targeted review requests regarding, without limitation, the following:
(i) The selection of the kidney transplant hospital to be an IOTA participant.
(ii) The attribution of IOTA waitlist patients and the attribution of IOTA transplant patients to the IOTA participant, or to any other kidney transplant hospital selected for participation in the IOTA Model, or to any kidney transplant hospital not selected for participation in the IOTA Model.
(iii) The methodology used for determining the achievement domain, efficiency domain, and quality domain.
(iv) The methodology used for calculating and assigning points for each metric within the achievement domain, efficiency domain, and quality domain.
(v) The methodology used for calculating the payment amount per Medicare kidney transplant paid to an IOTA participant.
(2) CMS may review a targeted review request that includes one or more of the limitations in paragraph (c)(1) of this section, provided that all remaining considerations of the request meet all other criteria for consideration by CMS in this section.
(d) Targeted review process. The IOTA participant must submit a request for targeted review in accordance with paragraphs (a) through (c) of this section. The process for a targeted review is as follows:
(1) Initial and final assessments. Upon receipt of a targeted review request from an IOTA participant CMS conducts an initial and final assessment as follows:
(i) Initial assessment. (A) CMS determines if the targeted review request meets the targeted review requirements in paragraph (b) of this section and contains sufficient information to substantiate the request.
(B) If the request is not compliant with paragraphs (a) through (c) of this section or requires additional information:
( 1 ) CMS follows up with the IOTA participant to request additional information in a form and manner as specified by CMS.
( 2 ) The IOTA participant must respond within 30 days of CMS's request for additional information in a form and manner as specified by CMS.
( 3 ) An IOTA participant's non-responsiveness to the request for additional information from CMS may result in the closure of the targeted review request.
(ii) Final assessment. (A) Upon completion of an initial assessment, as described in paragraph (d)(1)(i) of this section, CMS determines whether it erred in calculation, as disputed by the IOTA participant.
(B) If a calculation error is found as a result of an IOTA participant's targeted review request—
( 1 ) CMS—
( i ) Notifies the IOTA participant within 30 days of any findings in a form and manner as specified by CMS; and
( ii ) Resolves and corrects any resulting error or discrepancy in the amount of the upside risk payment or downside risk payment in a time and manner as determined by CMS.
( 2 ) CMS' correction of any error or discrepancy may delay the effective date of an IOTA participant's upside risk payments or downside risk payments.
(2) Targeted review decisions. Targeted review decisions made by CMS are final, unless submitted for administrative review as described in § 512.190.
§ 512.436   Extreme and uncontrollable circumstances.
(a) General. CMS—
(1) Applies determinations made under the Quality Payment Program with respect to whether an extreme and uncontrollable circumstance has occurred and the affected area during the PY; and
(2) Has sole discretion to determine the period during which an extreme and uncontrollable circumstance occurred and the percentage of attributed patients residing in affected areas.
(b) Downside risk payment. In the event of an extreme and uncontrollable circumstance, as determined by the Quality Payment Program, CMS may reduce the amount of the IOTA participant's downside risk payment, if applicable, prior to recoupment. CMS determines the amount of the reduction by multiplying the downside risk payment by both of the following:
(1) The percentage of total months during the PY affected by the extreme and uncontrollable circumstance.
(2) The percentage of attributed patients who reside in an area affected by the extreme and uncontrollable circumstance.
§ 512.440   Data sharing.
(a) General. CMS shares certain beneficiary-identifiable data as described in paragraph (b) of this section and certain aggregate data as described in paragraph (c) of this section with IOTA participants regarding attributed patients who are Medicare beneficiaries and performance under the model.
(b) Beneficiary-identifiable data. CMS shares beneficiary-identifiable data with IOTA participants as follows:
(1) CMS makes available certain beneficiary-identifiable data described in paragraphs (b)(4) and (5) of this section for IOTA participants to request for purposes of conducting health care operations work that falls within the first or second paragraph of the definition of health care operations at 45 CFR 164.501 on behalf of their attributed patients who are Medicare beneficiaries.
(2) An IOTA participant that wishes to receive beneficiary-identifiable data for its attributed patients who are Medicare beneficiaries must do all of the following:
(i) Submit a formal request for the data, on an annual basis in a manner and form and by a date specified by CMS, which identifies the data being requested and attests that—
(A) The IOTA participant is requesting this beneficiary-identifiable data as a HIPAA covered entity or as a business associate, as those terms are defined at 45 CFR 160.103, to the IOTA participant's providers and suppliers who are HIPAA covered entities; and
(B) The IOTA participant's request reflects the minimum data necessary, as set forth in paragraph (b)(6) of this section, for the IOTA participant to conduct health care operations work that falls within the first or second paragraph of the definition of health care operations at 45 CFR 164.501.
(ii) Limit the request to Medicare beneficiaries whose name appears on the quarterly attribution list who have been notified in compliance with § 512.450 that the IOTA participant has requested access to beneficiary-identifiable data, and who did not decline having their claims data shared with the IOTA participant as provided in paragraph (b)(7) of this section.
(iii) Sign and submit a data sharing agreement with CMS as set forth in paragraph (b)(8) of this section.
(3) CMS shares beneficiary-identifiable data with an IOTA participant on the condition that the IOTA participant, its IOTA collaborators, and other individuals or entities performing functions or services related to the IOTA participant's activities observe all relevant statutory and regulatory provisions regarding the appropriate use of data and the confidentiality and privacy of individually identifiable health information and comply with the terms of the data sharing agreement described in paragraph (b)(8) of this section.
(4) CMS omits from the beneficiary-identifiable data any information that is subject to the regulations in 42 CFR part 2 governing the confidentiality of substance use disorder patient records.
(5) The beneficiary-identifiable data will include, when available, the following information:
(i) Quarterly attribution lists. For the relevant PY, CMS shares with the IOTA participant the quarterly attribution lists, which will include but may not be limited to the following information for each attributed patient:
(A) The year that CMS attributed the patient to the IOTA participant.
(B) The effective date of the patient's attribution to the IOTA participant.
(C) The effective date of the patient's de-attribution from the IOTA participant and the reason for such removal (if applicable).
(D) For Medicare beneficiaries, the attributed patient's data sharing preference.
(ii) Beneficiary-identifiable claims data. CMS makes available certain beneficiary-identifiable claims data for retrieval by IOTA participants no later than 1 month after the start of each PY, in a form and manner specified by CMS. IOTA participants may retrieve the following data at any point during the relevant PY. This claims data includes all of the following:
(A) Three years of historical Parts A, B, and D claims data files from the 36 months immediately preceding the effective date of each attributed patient who is a Medicare beneficiary's attribution to the IOTA participant.
(B) Monthly Parts A, B, and D claims data files for attributed patients who are Medicare beneficiaries.
(C) Monthly Parts A, B, and D claims data files for Medicare beneficiaries who have been de-attributed from the IOTA participant for claims with a date of service before the date the Medicare beneficiary was de-attributed from the IOTA participant.
(6) The IOTA participant must limit its attributed Medicare beneficiary identifiable data requests to the minimum necessary to accomplish a permitted use of the data.
(i) The minimum necessary Parts A and B data elements may include but are not limited to the following data elements:
(A) Medicare beneficiary identifier (ID).
(B) Procedure code.
(C) Gender.
(D) Diagnosis code.
(E) Claim ID.
(F) The from and through dates of service.
(G) The provider or supplier ID.
(H) The claim payment type.
(I) Date of birth and death, if applicable.
(J) Tax identification number (TIN).
(K) National provider identifier (NPI).
(ii) The minimum necessary Part D data elements may include but are not limited to the following data elements:
(A) Beneficiary ID.
(B) Prescriber ID.
(C) Drug service date.
(D) Drug product service ID.
(E) Quantity dispensed.
(F) Days supplied.
(G) Brand name.
(H) Generic name.
(I) Drug strength.
(J) TIN.
(K) NPI.
(L) Indication if on formulary.
(M) Gross drug cost.
(7)(i)(A) IOTA participants must send Medicare beneficiaries a notification about the IOTA Model and the opportunity to decline claims data sharing as required under § 512.450.
(B) Such notifications must do both of the following:
( 1 ) State that the IOTA participant may have requested beneficiary-identifiable claims data about the Medicare beneficiary for purposes of its care coordination, quality improvement work, and population-based activities relating to improving health or reducing health care costs.
( 2 ) Inform the Medicare beneficiary how to decline having his or her claims information shared with the IOTA participant in the form and manner specified by CMS.
(ii) Medicare beneficiary requests to decline claims data sharing remain in effect unless and until a beneficiary subsequently contacts CMS to amend that request to permit claims data sharing with IOTA participants.
(iii) The opportunity to decline having claims data shared with an IOTA participant under paragraph (b)(7)(i) of this section does not apply to any of the following:
(A) The aggregate data that CMS provides to IOTA participants under paragraph (c) of this section.
(B) The initial attribution lists that CMS provides to IOTA participants as defined at § 512.402 and specified under § 512.414(c)(1)(ii).
(C) The quarterly attribution lists that CMS provides to IOTA participants as defined at § 512.402 and specified under § 512.414(c)(2)(ii).
(D) The annual attribution reconciliation list that CMS provides to IOTA participants as defined at § 512.402 and specified under § 512.414(c)(3)(ii).
(8)(i) If an IOTA participant wishes to retrieve any beneficiary-identifiable data specified in paragraph (b) of this section, the IOTA participant must complete and submit, on an annual basis, a signed data sharing agreement, to be provided in a form and manner specified by CMS, under which the IOTA participant agrees to all of the following:
(A) To comply with the requirements for use and disclosure of this beneficiary-identifiable data that are imposed on covered entities by the HIPAA regulations at 45 CFR part 160 and part 164, subparts A and E, and the requirements of the IOTA Model set forth in this part.
(B) To comply with additional privacy, security, breach notification, and data retention requirements specified by CMS in the data sharing agreement.
(C) To contractually bind each downstream recipient of the beneficiary-identifiable data that is a business associate of the IOTA participant, including all IOTA collaborators, to the same terms and conditions to which the IOTA participant is itself bound in its data sharing agreement with CMS as a condition of the business associate's receipt of the beneficiary-identifiable data retrieved by the IOTA participant under the IOTA Model.
(D) That if the IOTA participant misuses or discloses the beneficiary-identifiable data in a manner that violates any applicable statutory or regulatory requirements or that is otherwise non-compliant with the provisions of the data sharing agreement, CMS may do all of the following:
( 1 ) Deem the IOTA participant ineligible to retrieve the beneficiary-identifiable data under paragraph (b) of this section for any amount of time.
( 2 ) Terminate the IOTA participant's participation in the IOTA Model under § 512.466.
( 3 ) Subject the IOTA participant to additional sanctions and penalties available under the law.
(ii) An IOTA participant must comply with all applicable laws and the terms of the data sharing in order to retrieve beneficiary-identifiable data.
(c) Aggregate data. (1) CMS shares aggregate performance data with IOTA participants, in a form and manner to be specified by CMS, which has been de-identified in accordance with 45 CFR 164.514(b). This aggregate data includes, when available, certain de-identified data detailing the IOTA participant's performance against the transplant target information for each PY.
(2) [Reserved]
§ 512.442   Transparency requirements.
(a) Publication of transplant patient selection criteria. The IOTA participant must publicly post on its website the criteria used by the IOTA participant for evaluating and selecting patients for addition to their kidney transplant waitlist by the end of PY 1.
(b) [Reserved]
(c) Review of acceptance criteria. IOTA participants must review transplant organ offer acceptance criteria with their IOTA waitlist patients who are Medicare beneficiaries at least once every 6 months that the Medicare beneficiary is on their waitlist.
(1) The IOTA participant must conduct this review via patient visit, phone, email or mail on an individual basis, unless the Medicare beneficiary declines this review.
(2) [Reserved]
§ 512.446   Health equity plans.
(a) For each PY, an IOTA participant may voluntarily submit a health equity plan, by a date and in a form and manner determined by CMS, that meets the following requirements:
(1) Identifies target health disparities.
(2) Identifies the data sources used to inform the identification of target health disparities.
(3) Describes the health equity plan intervention.
(4) Includes a resource gap analysis.
(5) Includes a health equity project plan.
(6) Identifies health equity plan performance measure(s).
(7) Identifies health equity goals and describes how the IOTA participant will use the health equity goals to monitor and evaluate progress in reducing targeted health disparities.
(b) [Reserved]
§ 512.450   Required beneficiary notifications.
(a) General. (1) IOTA participants must provide notice to attributed patients that they are participating in the IOTA Model.
(2) CMS provides a notification template that IOTA participants must use. The template, at minimum does all of the following:
(i) Indicates content that the IOTA participant must not change.
(ii) Indicates where the IOTA participant may insert its own content.
(iii) Includes information regarding the attributed patient's opportunity to opt-out of data sharing with IOTA participants and how they may opt out if they choose to do so.
(3) To notify attributed patients of their rights and protections and that the IOTA participant is participating in the IOTA Model, the IOTA participant must do all of the following:
(i) Prominently display informational materials in each of their office or facility locations where attributed patients receive treatment.
(ii) Include this notification in a clear manner on its public facing website.
(iii) Provide this notification to each attributed patient in a paper format.
(b) Applicability of general Innovation Center model provisions. (1) The requirements described in § 512.120(c) do not apply to the CMS-provided materials described in paragraph (a) of this section.
(2) All other IOTA participant communications that are descriptive model materials and activities as defined under § 512.110 must meet the requirements described in § 512.120(c).
§ 512.452   Financial sharing arrangements and attributed patient engagement incentives.
(a) General. (1) The IOTA participant—
(i) May enter into a sharing arrangement with an IOTA collaborator to make a gainsharing payment, or to receive an alignment payment, or both; and
(ii) Must not make a gainsharing payment or receive an alignment payment except in accordance with a sharing arrangement.
(2) A sharing arrangement must comply with the provisions of this section and all other applicable laws and regulations, including the applicable fraud and abuse laws and all applicable payment and coverage requirements.
(3) The IOTA participant must develop, maintain, and use a set of written policies for selecting providers and suppliers to be IOTA collaborators.
(i) The selection criteria must include the quality of care delivered by the potential IOTA collaborator.
(ii) The selection criteria cannot be based directly or indirectly on the volume or value of referrals or business otherwise generated by, between or among any of the following:
(A) The IOTA participant.
(B) Any IOTA collaborator.
(C) Any collaboration agent.
(D) Any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.
(iii) The written policies must contain criteria related to, and inclusive of, the anticipated contribution to performance across the achievement domain, efficiency domain, and quality domain by the potential IOTA collaborator.
(4) The board or other governing body of the IOTA participant must have responsibility for overseeing the IOTA participant's participation in the IOTA Model, including but not limited to all of the following:
(i) Arrangements with IOTA collaborators.
(ii) Payment of gainsharing payments.
(iii) Receipt of alignment payments.
(iv) Use of beneficiary incentives in the IOTA Model.
(5) If an IOTA participant enters into a sharing arrangement, its compliance program must include oversight of sharing arrangements and compliance with the applicable requirements of the IOTA Model.
(b) Requirements. (1) A sharing arrangement must be—
(i) In writing;
(ii) Signed by the parties; and
(iii) Entered into before care is furnished to an attributed patient during the PY under the sharing arrangement.
(2) Participation in a sharing arrangement must be voluntary and without penalty for nonparticipation.
(3) Participation in the sharing arrangement must require the IOTA collaborator to comply with the requirements of this model, as those pertain to their actions and obligations.
(4) The sharing arrangement—
(i) Must set out the mutually agreeable terms for the financial arrangement between the parties to guide and reward model care redesign for future performance across the achievement domain, efficiency domain, and quality domain;
(ii) Must not reflect the results of model PYs that have already occurred; and
(iii) Where the financial outcome of the sharing arrangement terms are known before signing.
(5) The sharing arrangement must require the IOTA collaborator and its employees, contractors (including collaboration agents), and subcontractors to comply with all of the following:
(i) The applicable provisions of this part (including requirements regarding beneficiary notifications, access to records, record retention, and participation in any evaluation, monitoring, compliance, and enforcement activities performed by CMS or its designees).
(ii) All applicable Medicare provider enrollment requirements at § 424.500 of this chapter, including having a valid and active TIN or NPI, during the term of the sharing arrangement.
(iii) All other applicable laws and regulations.
(6) The sharing arrangement must require the IOTA collaborator to have or be covered by a compliance program that includes oversight of the sharing arrangement and compliance with the requirements of the IOTA Model that apply to its role as an IOTA collaborator, including any distribution arrangements.
(7) The sharing arrangement must not pose a risk to beneficiary access, beneficiary freedom of choice, or quality of care.
(8) The written agreement memorializing a sharing arrangement must specify all of the following:
(i) The purpose and scope of the sharing arrangement.
(ii) The identities and obligations of the parties, including specified IOTA activities and other services to be performed by the parties under the sharing arrangement.
(iii) The date of the sharing arrangement.
(iv) Management and staffing information, including type of personnel or contractors that would be primarily responsible for carrying out IOTA activities.
(v) The financial or economic terms for payment, including all of the following:
(A) Eligibility criteria for a gainsharing payment.
(B) Eligibility criteria for an alignment payment.
(C) Frequency of gainsharing or alignment payment.
(D) Methodology and accounting formula for determining the amount of a gainsharing payment that is substantially based on performance across the achievement domain, efficiency domain and quality domain, and the provision of IOTA activities.
(E) Methodology and accounting formula for determining the amount of an alignment payment.
(9) The sharing arrangement must not—
(i) Induce—
(A) The IOTA participant;
(B) The IOTA collaborator; or
(C) Any employees, contractors, or subcontractors of the IOTA participant or IOTA collaborator to reduce or limit medically necessary services to any attributed patient; or
(ii) Restrict the ability of an IOTA collaborator to make decisions in the best interests of its patients, including the selection of devices, supplies, and treatments.
(c) Gainsharing payments and alignment payments. (1) Gainsharing payments, if any, must meet all of the following:
(i) Be derived solely from upside risk payments.
(ii) Be distributed on an annual basis (not more than once per performance year).
(iii) Not be a loan, advance payment, or payment for referrals or other business.
(iv) Be clearly identified as a gainsharing payment at the time it is paid.
(2) To be eligible to receive a gainsharing payment an IOTA collaborator must contribute to performance across the achievement domain, efficiency domain or quality domain for the PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment. The contribution to performance across the achievement domain, efficiency domain, or quality domain criteria must be established by the IOTA participant and directly related to the care of attributed patients.
(3) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment:
(i) An IOTA collaborator other than PGP, NPPGP, or TGP must have directly furnished a billable item or service to an attributed patient that occurred in the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment or incurred a downside risk payment.
(ii) An IOTA collaborator that is a PGP, NPPGP, or TGP must meet the following criteria:
(A) The PGP, NPPGP, or TGP must have billed for an item or service that was rendered by one or more PGP member, NPPGP member, or TGP member respectively to an attributed patient that occurred during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment or incurred a downside risk payment.
(B) The PGP, NPPGP, or TGP must have contributed to IOTA activities and been clinically involved in the care of attributed patients during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment or incurred a downside risk payment.
(4) The total amount of a gainsharing payment for a PY paid to an IOTA collaborator that is a physician or nonphysician practitioner must not exceed 50 percent of the Medicare-approved amounts under the PFS for items and services billed by that physician or nonphysician practitioner to the IOTA participant's attributed patients during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment being made.
(5) The total amount of a gainsharing payment for a PY paid to an IOTA collaborator that is a PGP, NPPGP, or TGP must not exceed 50 percent of the Medicare-approved amounts under the PFS for items and services billed by that PGP, NPPGP, or TGP and furnished to the IOTA participant's attributed patients by the PGP members, NPPGP members, or TGP members respectively during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment being made.
(6) The amount of any gainsharing payments must be determined in accordance with a methodology that is substantially based on contribution to the performance across the achievement domain, efficiency domain or quality domain and the provision of IOTA activities. The methodology may take into account the amount of such IOTA activities provided by an IOTA collaborator relative to other IOTA collaborators.
(7) For a PY, the aggregate amount of all gainsharing payments that are derived from the upside risk payment the IOTA participant receives from CMS must not exceed the amount of that upside risk payment.
(8) No entity or individual, whether a party to a sharing arrangement or not, may condition the opportunity to make or receive gainsharing payments or to make or receive alignment payments directly or indirectly on the volume or value of referrals or business otherwise generated by, between or among the IOTA participant, any IOTA collaborator, any collaboration agent, or any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.
(9) An IOTA participant must not make a gainsharing payment to an IOTA collaborator that is subject to any action for noncompliance with this part, or the fraud and abuse laws, or for the provision of substandard care to attributed patients or other integrity problems.
(10) The sharing arrangement must require the IOTA participant to recoup any gainsharing payment that contained funds derived from a CMS overpayment on an upside risk payment or was based on the submission of false or fraudulent data.
(11) Alignment payments from an IOTA collaborator to an IOTA participant may be made at any interval that is agreed upon by both parties, and must not be—
(i) Issued, distributed, or paid prior to the calculation by CMS of a payment amount reflected in the notification of the downside risk payment;
(ii) Loans, advance payments, or payments for referrals or other business; or
(iii) Assessed by an IOTA participant if the IOTA participant does not owe a downside risk payment.
(12) The IOTA participant must not receive any amounts under a sharing arrangement from an IOTA collaborator that are not alignment payments.
(13) For a PY, the aggregate amount of all alignment payments received by the IOTA participant must not exceed 50 percent of the IOTA participant's downside risk payment amount.
(14) The aggregate amount of all alignment payments from a single IOTA collaborator to the IOTA participant may not be greater than 25 percent of the IOTA participant's downside risk payment over the course of a single PY for an IOTA collaborator.
(15) The amount of any alignment payments must be determined in accordance with a methodology that does not directly account for the volume or value of referrals or business otherwise generated by, between or among the IOTA participant, any IOTA collaborator, any collaboration agent, or any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.
(16) All gainsharing payments and any alignment payments must be administered by the IOTA participant in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book).
(17) All gainsharing payments and alignment payments must be made by check, EFT, or another traceable cash transaction.
(d) Documentation requirements. (1) The IOTA participant must do all of the following:
(i) Document the sharing arrangement contemporaneously with the establishment of the arrangement.
(ii) Maintain accurate current and historical lists of all IOTA collaborators, including IOTA collaborator names and addresses. With respect to these lists the IOTA participant must—
(A) Update such lists on at least a quarterly basis; and
(B) On a web page on the IOTA participant's website, the IOTA participant must—
( 1 ) Publicly report the current and historical lists of IOTA collaborators; and
( 2 ) Include any written policies for selecting individuals and entities to be IOTA collaborators required by the IOTA participant.
(iii) Maintain and require each IOTA collaborator to maintain contemporaneous documentation with respect to the payment or receipt of any gainsharing payment or alignment payment that includes at a minimum all of the following:
(A) Nature of the payment (gainsharing payment or alignment payment).
(B) Identity of the parties making and receiving the payment.
(C) Date of the payment.
(D) Amount of the payment.
(E) Date and amount of any recoupment of all or a portion of an IOTA collaborator's gainsharing payment.
(F) Explanation for each recoupment, such as whether the IOTA collaborator received a gainsharing payment that contained funds derived from a CMS overpayment of an upside risk payment or was based on the submission of false or fraudulent data.
(2) The IOTA participant must keep records of all of the following:
(i) Its process for determining and verifying its potential and current IOTA collaborators' eligibility to participate in Medicare.
(ii) A description of current health information technology, including systems to track upside risk payments and downside risk payments.
(iii) Its plan to track gainsharing payments and alignment payments.
(3) The IOTA participant must retain and provide access to, and must require each IOTA collaborator to retain and provide access to, the required documentation in accordance with §§ 512.460 and 1001.952(ii).
§ 512.454   Distribution arrangements.
(a) General. (1) An IOTA collaborator may distribute all or a portion of any gainsharing payment it receives from the IOTA participant only in accordance with a distribution arrangement, as defined at § 512.402.
(2) All distribution arrangements must comply with the provisions of this section and all other applicable laws and regulations, including the fraud and abuse laws.
(b) Requirements. (1) All distribution arrangements must be in writing and signed by the parties, contain the date of the agreement, and be entered into before care is furnished to attributed patients under the distribution arrangement.
(2) Participation in a distribution arrangement must be voluntary and without penalty for nonparticipation.
(3) The distribution arrangement must require the collaboration agent to comply with all applicable laws and regulations.
(4) The opportunity to make or receive a distribution payment must not be conditioned directly or indirectly on the volume or value of referrals or business otherwise generated by, between or among the IOTA participant, any IOTA collaborator, any collaboration agent, or any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.
(5) The amount of any distribution payments from an NPPGP to an NPPGP member, or from a TGP to a TGP member must be determined in accordance with a methodology that is substantially based on contribution to performance across the achievement domain, efficiency domain, and quality domain and the provision of IOTA activities and that may take into account the amount of such IOTA activities provided by a collaboration agent relative to other collaboration agents.
(6) The amount of any distribution payments from a PGP must be determined either in a manner that complies with § 411.352(g) of this chapter or in accordance with a methodology that is substantially based on contribution to performance across the achievement domain, efficiency domain and quality domain and the provision of IOTA activities and that may take into account the amount of such IOTA activities provided by a collaboration agent relative to other collaboration agents.
(7) Except for a distribution payment from a PGP to a PGP member that complies with § 411.352(g) of this chapter, a collaboration agent is eligible to receive a distribution payment only if the collaboration agent furnished or billed for an item or service rendered to an attributed patient that occurred during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment being distributed.
(8) Except for a distribution payment from a PGP to a PGP member that complies with § 411.352(g) of this chapter, the total amount of distribution payments for a PY paid to a collaboration agent must not exceed 50 percent of the total Medicare-approved amounts under the PFS for items and services billed by that PGP, NPPGP or TGP for items and services furnished by PGP members, NPPGP members or TGP members respectively to attributed patients that occurred during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment being distributed.
(9) With respect to the distribution of any gainsharing payment received by a PGP, NPPGP, or TGP, the total amount of all distribution payments must not exceed the amount of the gainsharing payment received by the IOTA collaborator from the IOTA participant.
(10) All distribution payments must be made by check, electronic funds transfer, or another traceable cash transaction.
(11) The collaboration agent must retain the ability to make decisions in the best interests of the patient, including the selection of devices, supplies, and treatments.
(12) The distribution arrangement must not—
(i) Induce the collaboration agent to reduce or limit medically necessary items and services to any Medicare beneficiary; or
(ii) Reward the provision of items and services that are medically unnecessary.
(13) The IOTA collaborator must maintain contemporaneous documentation regarding distribution arrangements in accordance with § 512.454, including the following:
(i) The relevant written agreements.
(ii) The date and amount of any distribution payment(s).
(iii) The identity of each collaboration agent that received a distribution payment.
(iv) A description of the methodology and accounting formula for determining the amount of any distribution payment.
(14) The IOTA collaborator may not enter into a distribution arrangement with any collaboration agent that has a sharing arrangement with the same IOTA participant.
(15) The IOTA collaborator must retain and provide access to and must require collaboration agents to retain and provide access to, the required documentation in accordance with § 512.460.
§ 512.455   Enforcement authority.
(a) OIG authority. Nothing contained in the terms of the IOTA Model or this part limits or restricts the authority of the HHS Office of Inspector General, including its authority to audit, evaluate, investigate, or inspect the IOTA participant, IOTA collaborators, or any other person or entity or their records, data, or information, without limitation.
(b) Other authority. Nothing contained in the terms of the IOTA Model or this part limits or restricts the authority of any government agency permitted by law to audit, evaluate, investigate, or inspect the participant hospital, IOTA collaborators, or any other person or entity or their records, data, or information, without limitation.
§ 512.456   Beneficiary incentive: Part B and Part D immunosuppressive drug cost sharing support.
(a) Cost sharing support for Part B and Part D immunosuppressive drugs. For immunosuppressive drugs covered under Medicare Part B or Medicare Part D and prescribed to an attributed patient, the IOTA participant may subsidize, in whole or in part, the cost sharing associated with the immunosuppressive drugs under Part B and Part D immunosuppressive drug cost sharing support defined at § 512.402 if all of the following conditions are met:
(1) The attributed patient is an eligible attributed patient as defined at § 512.402.
(2) The IOTA participant must provide a written policy in a form and manner specified by CMS for the provision of Part B and Part D immunosuppressive drug cost sharing support that is approved by CMS before the PY in which the cost sharing support is made available.
(i) The IOTA participant must revalidate the written policy with CMS and in a form and manner specified by CMS for the provision of Part B and Part D immunosuppressive drug cost sharing support before its provision in a subsequent PY.
(ii) The IOTA participant's initial written policy and the revalidation of the written policy must establish and justify the criteria that qualify an eligible attributed patient to receive Part B and Part D immunosuppressive drug cost sharing support.
(iii) The IOTA participant's written policy and the revalidation of the written policy must include an attestation that the IOTA participant will not, in providing Part B and Part D immunosuppressive drug cost sharing support, take into consideration the type, cost, generic status, or manufacturer of the immunosuppressive drug(s) or limit an eligible attributed patients' choice of pharmacy.
(b) Restrictions. (1) An IOTA participant must not take into consideration the type, cost, generic status, or manufacturer of the immunosuppressive drug(s) or limit an eligible attributed patients' choice of pharmacy when providing Part B and Part D immunosuppressive drug cost sharing support.
(2) An IOTA participant may not receive financial or operational support for Part B and Part D immunosuppressive drug cost sharing support from pharmacies and pharmaceutical manufacturers.
(c) Documentation. (1) An IOTA participant must maintain contemporaneous documentation that includes all of the following:
(i) The identity of the eligible attributed patient to whom Part B and Part D immunosuppressive drug cost sharing support was provided.
(ii) The date or dates on which Part B and Part D immunosuppressive drug cost sharing support was provided.
(iii) The amount or amounts of Part B and Part B immunosuppressive drug cost sharing support that was provided.
(2) An IOTA participant must retain and make available records pertaining to Part B and Part D immunosuppressive drug cost sharing support to the Federal Government in accordance with § 512.460.
§ 512.458   Attributed patient engagement incentives.
(a) General. An IOTA participant may choose to provide any or all of the following types of attributed patient engagement incentives to an attributed patient under the conditions described in paragraph (b) of this section:
(1) Communication devices and related communication services directly pertaining to communication with an IOTA participant or IOTA collaborator to improve communication between an attributed patient and an IOTA participant or IOTA collaborator.
(2) Transportation to and from an IOTA participant and between other providers and suppliers involved in the provision of ESRD care.
(3) Mental health services to address an attributed patient's behavioral health symptoms pre- and post-transplant.
(4) In-home care to support the health of the attributed patient or the kidney transplant in the post-transplant period.
(b) Conditions. An IOTA participant may provide attributed patient engagement incentives of the type described in paragraphs (a)(1) through (4) of this section when all of the following conditions are met:
(1) An IOTA participant provides a written policy, in a form and manner specified by CMS, for the provision of attributed patient engagement incentives.
(2) CMS approves an IOTA participants written policy before the first PY in which an attributed patient engagement incentive is first made available.
(3) CMS revalidates the IOTA participant's written policy in a form and manner specified by CMS prior to each PY in which an attributed patient engagement incentive is offered subsequently.
(4) The IOTA participant includes in its written policy:
(i) A description of the items or services that will be provided as attributed patient engagement incentives.
(ii) An explanation of how each item or service that will be an attributed patient engagement incentive has a reasonable connection to any of the following:
(A) An attributed patient achieving and maintaining active status on a kidney transplant waitlist.
(B) An attributed patient accessing the kidney transplant procedure.
(C) The health of the attributed patient or the kidney transplant in the post-transplant period.
(D) A justification for the need for the attributed patient engagement incentives that is specific to the IOTA participant's attributed patient population.
(iii) An attestation that items that are attributed patient engagement incentives will be provided directly to an attributed patient.
(iv) An attestation that the IOTA participant will pay service providers directly for services that are attributed patient engagement incentives.
(v) An attestation that any items or services acquired by the IOTA participant that will be furnished as attributed patient engagement incentives will be acquired for the minimum amount necessary for an attributed patient to achieve the goals described in paragraphs (3)(ii)(A) through (C) of this paragraph.
(c) Restrictions. (1) An IOTA participant must provide items that are attributed patient engagement incentives directly to an attributed patient.
(2) An IOTA participant must pay service providers directly for any services that are offered as attributed patient engagement incentive.
(3) An IOTA participant must not offer an attributed patient engagement incentive that is tied to the receipt of items or services from a particular provider or supplier.
(4) An IOTA participant must not advertise or promote an item or service that is an attributed patient engagement incentive, except to make an attributed patient aware of the availability of the items or services at the time an attributed patient could reasonably benefit from them.
(5) An IOTA participant must not receive donations directly or indirectly to purchase attributed patient engagement incentives.
(6) An IOTA participant must retrieve items that that are attributed patient engagement incentives from the attributed patient when the attributed patient is no longer eligible for the that item or at the conclusion of the IOTA Model, whichever is earlier.
(i) Documented, diligent, good faith attempts to retrieve items that are attributed patient engagement incentives are deemed to meet the retrieval requirement.
(ii) [Reserved]
(7) Items that are communication devices:
(i) May not exceed $1,000 in retail value for any one attributed patient in any one PY;
(ii) Must remain the property of the IOTA participant;
(iii) Must be retrieved from the attributed patient by the IOTA participant—
(A) When the attributed patient is no longer eligible for the communication device or at the conclusion of the IOTA Model, whichever is earlier; and
(B) Before another communication device may be made available to the same attributed patient.
(d) Documentation. The IOTA participant must do all of the following:
(1) Maintain contemporaneous documentation of items and services furnished as attributed patient engagement incentives that includes, at minimum all of the following:
(i) The date the attributed patient engagement incentive is provided.
(ii) The identity of the attributed patient to whom the item or service was provided.
(2) Document all retrieval attempts of items that are attributed patient engagement incentives, including the ultimate date of retrieval.
(3)(i) Retain records pertaining to furnished attributed patient engagement incentives.
(ii) Make the records available to the Federal Government in accordance with § 512.460.
§ 512.459   Application of the CMS-sponsored model arrangements and patient incentives safe harbor.
(a) Application of the CMS-sponsored model arrangements safe harbor. CMS has determined that the Federal anti-kickback statute safe harbor for CMS-sponsored model arrangements (42 CFR 1001.952(ii)(1)) is available to protect remuneration furnished in the IOTA Model in the form of the Sharing Arrangement's gainsharing payments, the Sharing Arrangement's alignment payments, and the Distribution Arrangement's distribution payments that meet all safe harbor requirements set forth in 42 CFR 1001.952(ii), 512.452, and 512.454.
(b) Application of the CMS-sponsored model patient incentives safe harbor. CMS has determined that the Federal anti-kickback statute safe harbor for CMS-sponsored model patient incentives (42 CFR 1001.952(ii)(2)) is available to protect remuneration furnished in the IOTA Model in the form of Part B and Part D immunosuppressive drug cost sharing support and the attributed patient engagement incentives that meet all safe harbor requirements set forth in 42 CFR 1001.952(ii), 512.456 and 512.458.
§ 512.460   Audit rights and records retention.
(a) Right to audit. The Federal Government, including CMS, HHS, and the Comptroller General, or their designees, has the right to audit, inspect, investigate, and evaluate any documents and other evidence regarding implementation of the IOTA Model.
(b) Access to records. The IOTA participant and its IOTA collaborators must maintain and give the Federal Government, including, but not limited to, CMS, HHS, and the Comptroller General, or their designees, access to all such documents (including books, contracts, and records) and other evidence sufficient to enable the audit, evaluation, inspection, or investigation of the implementation of the IOTA Model, including without limitation, documents, and other evidence regarding all of the following:
(1) Compliance by the IOTA participant and its IOTA collaborators with the terms of the IOTA Model.
(2) The accuracy of model-specific payments made under the IOTA Model.
(3) The IOTA participant's downside risk payments owed to CMS under the IOTA Model.
(4) Quality measure information and the quality of services performed under the terms of the IOTA Model.
(5) Utilization of items and services furnished under the IOTA Model.
(6) The ability of the IOTA participant to bear the risk of potential losses and to repay any losses to CMS, as applicable.
(7) Contemporaneous documentation of cost sharing support furnished under Part B and Part D immunosuppressive drug cost sharing support that includes the following:
(i) The identity of the eligible attributed patient to whom Part B and Part D immunosuppressive drug cost sharing support was provided.
(ii) The date or dates on which Part B and Part D immunosuppressive drug cost sharing support was provided.
(iii) The amount or amounts of the cost sharing support provided to the attributed patient.
(8) Contemporaneous documentation of items and services furnished as attributed patient engagement incentives in accordance with § 512.458 that includes all of the following, at minimum:
(i) The date the attributed patient engagement incentive is provided.
(ii) The identity of the attributed patient to whom the item or service was provided.
(9) Patient safety.
(10) Any other program integrity issues.
(c) Record retention. (1) The IOTA participant and its IOTA collaborators must maintain the documents and other evidence described in paragraph (b) of this section and other evidence for a period of 6 years from the last payment determination for the IOTA participant under the IOTA Model or from the date of completion of any audit, evaluation, inspection, or investigation, whichever is later, unless—
(i) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the IOTA participant at least 30 days before the normal disposition date; or
(ii) There has been a termination, dispute, or allegation of fraud or similar fault against the IOTA participant or its IOTA collaborators, in which case the records must be maintained for an additional 6 years from the date of any resulting final resolution of the termination, dispute, or allegation of fraud or similar fault.
(2)(i) If CMS notifies the IOTA participant of the special need to retain a record or group of records in accordance with paragraph (c)(1)(i) of this section, the IOTA participant must maintain the records for such period of time as determined by CMS.
(ii) If CMS notifies the IOTA participant of a special need to retain records in accordance with paragraph (c)(1)(ii) of this section, the IOTA participant must notify its IOTA collaborators of this need to retain records for the additional period specified by CMS.
§ 512.462   Compliance and monitoring.
(a) Compliance with laws. The IOTA participant must comply with all applicable laws and regulations.
(b) CMS monitoring activities. (1) CMS, or its approved designee, may conduct monitoring activities to ensure compliance by the IOTA participant and IOTA collaborators with the terms of the IOTA Model under this subpart to—
(i) Understand IOTA participants' use of model-specific payments; and
(ii) Promote the safety of attributed patients and the integrity of the IOTA Model.
(2) Monitoring activities may include, without limitation, all of the following:
(i) Documentation requests sent to the IOTA participant and its IOTA collaborators, including surveys and questionnaires.
(ii) Audits of claims data, quality measures, medical records, and other data from the IOTA participant and its IOTA collaborators.
(iii) Interviews with the IOTA participant, including leadership personnel, medical staff, other associates, and its IOTA collaborators.
(iv) Interviews with attributed patients and their caregivers.
(v) Site visits to the IOTA participant and its IOTA collaborators, performed in a manner consistent with paragraph (c) of this section.
(vi) Monitoring quality outcomes and attributed patient data.
(vii) Tracking beneficiary complaints and appeals.
(viii) Monitoring the definition of and justification for the subpopulation of the IOTA participant's eligible attributed patients that may receive Part B and Part D immunosuppressive drug cost sharing support in accordance with § 512.456.
(ix) Monitoring the provision of attributed patient engagement incentives provided in accordance with § 512.458.
(x) Monitoring out of sequence allocation of kidneys by—
(A) Assessing the frequency at which IOTA waitlist patients, top-ranked on an IOTA participant's kidney transplant waitlist, receive the organ that was initially offered to them; and
(B) Determining the reasons behind cases where IOTA waitlist patients identified in paragraph (b)(x)(A) of this section, did not receive the kidney offered to them.
(3) In conducting monitoring and oversight activities, CMS or its designees may use any relevant data or information including without limitation all Medicare claims submitted for items or services furnished to IOTA transplant patients or IOTA waitlist patients or both.
(c) Site visits. (1) The IOTA participant must cooperate in periodic site visits performed by CMS or its designees in order to facilitate the evaluation of the IOTA Model in accordance with section 1115A(b)(4) of the ACT and the monitoring of the IOTA participant's compliance with the terms of the IOTA Model, including this subpart.
(2) When scheduling the site visit, CMS or its designee provides, to the extent practicable, the IOTA participant with no less than 15 days advance notice of any site visit. CMS—
(i) Attempts, to the extent practicable, to accommodate a request for particular dates in scheduling site visits; and
(ii) Does not accept a date request from the IOTA participant that is more than 60 days after the date of the initial site visit notice from CMS.
(3) The IOTA participant must ensure that personnel with the appropriate responsibilities and knowledge associated with the purpose of the site visit are available during all site visits.
(4) CMS may perform unannounced site visits at the office of the IOTA participant at any time to investigate concerns about the health or safety of attributed patients or other program integrity issues.
(5) Nothing in this part may be construed to limit or otherwise prevent CMS from performing site visits permitted or required by applicable law.
(d) Reopening of payment determinations. (1) CMS may reopen an IOTA Model-specific payment determination on its own motion or at the request of the IOTA participant, within 4 years from the date of the determination, for good cause (as defined at § 405.986 of this chapter) except if there exists reliable evidence that the determination was procured by fraud or similar fault as defined at § 405.902 of this chapter. In the case of fraud or similar fault, CMS may reopen an IOTA Model specific payment determination at any time.
(2) CMS' decision regarding whether to reopen a model-specific payment determination is binding and not subject to appeal.
§ 512.464   Remedial action.
(a) Grounds for remedial action. CMS may impose one or more remedial actions described in paragraph (b) of this section if CMS determines that:
(1) The IOTA participant has failed to furnish 11 or more kidney transplants for patients aged 18 years or older, regardless of payer, during a PY or any baseline years.
(2) The IOTA participant or its IOTA collaborator has failed to comply with any of the terms of the IOTA Model, including this subpart.
(3) The IOTA participant has failed to comply with transparency requirements described at § 512.442.
(4) The IOTA participant or its IOTA collaborator has failed to comply with any applicable Medicare program requirement, rule, or regulation.
(5) The IOTA participant or its IOTA collaborator has taken any action that threatens the health or safety of an attributed patient.
(6) The IOTA participant or its IOTA collaborator has submitted false data or made false representations, warranties, or certifications in connection with any aspect of the IOTA Model.
(7) The IOTA participant or its IOTA collaborator has undergone a change in control that presents a program integrity risk.
(8) The IOTA participant or its IOTA collaborator is subject to any sanctions of an accrediting organization or a Federal, State, or local government agency.
(9) The IOTA participant or its IOTA collaborator is subject to investigation or action by HHS (including the HHS Office of Inspector General or CMS) or the Department of Justice due to an allegation of fraud or significant misconduct, including any of the following:
(i) Being subject to the filing of a complaint or filing of a criminal charge.
(ii) Being subject to an indictment.
(iii) Being named as a defendant in a False Claims Act qui tam matter in which the Federal Government has intervened, or similar action.
(10) The IOTA participant or its IOTA collaborator has failed to demonstrate improved performance following any remedial action imposed under this section.
(11) The IOTA participant has misused or disclosed beneficiary-identifiable data in a manner that violates any applicable statutory or regulatory requirements or that is otherwise non-compliant with the provisions of the applicable data sharing agreement.
(b) Remedial actions. If CMS determines that one or more grounds for remedial action described in paragraph (a) of this section has taken place, CMS may take one or more of the following remedial actions:
(1) Notify the IOTA participant and, if appropriate, require the IOTA participant to notify its IOTA collaborators of the violation.
(2) Require the IOTA participant to provide additional information to CMS or its designees.
(3) Subject the IOTA participant to additional monitoring, auditing, or both.
(4) Prohibit the IOTA participant from distributing model-specific payments, as applicable.
(5) Require the IOTA participant to terminate, immediately or by a deadline specified by CMS, its sharing arrangement with an IOTA collaborator with respect to the IOTA Model.
(6) Terminate the IOTA participant from the IOTA Model.
(7) Suspend or terminate the ability of the IOTA participant to provide Part B and Part D immunosuppressive drug cost sharing support in accordance with § 512.456 or attributed patient engagement incentives in accordance with § 512.458.
(8) Require the IOTA participant to submit a corrective action plan in a form and manner and by a deadline specified by CMS.
(9) Discontinue the provision of data sharing and reports to the IOTA participant.
(10) Recoup model-specific payments.
(11) Reduce or eliminate a model-specific payment otherwise owed to the IOTA participant.
(12) [Reserved]
(13) Any other action as may be permitted under the terms of this part.
§ 512.466   Termination.
(a) Termination of IOTA participant from the IOTA Model by CMS. CMS may immediately or with advance notice terminate an IOTA participant from participation in the model if CMS does any of the following:
(1) Determines that it no longer has the funds to support the IOTA Model.
(2) Modifies or terminates the IOTA Model in accordance with section 1115A(b)(3)(B) of the Act.
(3) Determines that the IOTA participant has done any of the following:
(i) Failed to comply with any model requirements or any other Medicare program requirement, rule, or regulation.
(ii) Failed to comply with a monitoring or auditing plan or both.
(iii) Failed to submit, obtain approval for, implement or fully comply with the terms of a corrective action plan.
(iv) Failed to demonstrate improved performance following any remedial action.
(v) Taken any action that threatens the health or safety of a Medicare beneficiary or other patient.
(vi) Submitted false data or made false representations, warranties, or certifications in connection with any aspect of the IOTA Model.
(vii) Undergoes a change in control.
(viii) Assigns or purports to assign any of the rights or obligations under the IOTA Model, voluntarily or involuntarily, whether by merger, consolidation, dissolution, operation of law, or any other manner, without the written consent of CMS.
(ix) Poses significant program integrity risks, including but not limited to—
(A) Is subject to sanctions or other actions of an accrediting organization or a Federal, State, or local government agency; or
(B) Is subject to investigation or action by HHS (including OIG and CMS) or the Department of Justice due to an allegation of fraud or significant misconduct, including being subject to the filing of a complaint, filing of a criminal charge, being subject to an indictment, being named as a defendant in a False Claims Act qui tam matter in which the government has intervened, or similar action.
(b) Termination of Model participation by IOTA participant. The IOTA participant may not terminate their participation in the IOTA Model.
(c) Financial settlement upon termination. If CMS terminates the IOTA participant's participation in the IOTA Model, CMS calculates the final performance score and any upside risk payment or downside risk payment, if applicable, for the entire PY in which the IOTA participant's participation in the model was terminated.
(1) If CMS terminates the IOTA participant's participation in the IOTA Model, CMS determines the IOTA participant's effective date of termination.
(2) If CMS terminates the IOTA participant for any reasons listed under § 512.466:
(i) CMS does not make any payments of upside risk payment for the PY in which the IOTA participant was terminated; and
(ii) The IOTA participant will remain liable for payment of any downside risk payment up to and including the PY in which termination becomes effective.
(d) Termination of the IOTA Model by CMS. (1) The general provisions for the Innovation Center model termination by CMS listed under § 512.165 apply to the IOTA Model.
(i) CMS may terminate the IOTA Model for reasons including, but not limited to, those set forth in § 512.165(a).
(ii) If CMS terminates the IOTA Model, CMS provides written notice to IOTA participants specifying the grounds for model termination and the effective date of such termination.
(2) In accordance with section 1115A(d)(2) of the Act and § 512.170(e), termination of the IOTA Model under section 1115A(b)(3)(B) of the Act is not subject to administrative or judicial review.
(3) If CMS terminates the IOTA Model, the financial settlement terms described in paragraph (c) of this section apply.
§ 512.468   Bankruptcy and other notifications.
(a) Notice of bankruptcy. (1) If the IOTA participant has filed a bankruptcy petition, whether voluntary or involuntary, the IOTA participant must provide written notice of the bankruptcy to CMS and to the U.S. Attorney's Office in the district where the bankruptcy was filed, unless final payment has been made by either CMS or the IOTA participant under the terms of each model tested under section 1115A of the Act in which the IOTA participant is participating or has participated and all administrative or judicial review proceedings relating to any payments under such models have been fully and finally resolved.
(2) The notice of bankruptcy must meet all of the following:
(i) Be sent by certified mail no later than 5 days after the petition has been filed.
(ii) Contain—
(A) A copy of the filed bankruptcy petition (including its docket number); and
(B) A list of all models tested under section 1115A of the Act in which the IOTA participant is participating or has participated.
(b) Change in control. (1) The IOTA participant must provide written notice to CMS at least 90 days before the effective date of any change in control.
(2) CMS may terminate an IOTA participant from the IOTA Model under § 512.466 if the IOTA participant undergoes a change in control.
(c) Prohibition on assignment. (1) Unless CMS provides prior written consent, an IOTA participant must not transfer, including by merger (whether the IOTA participant is the surviving or disappearing entity), consolidation, dissolution, or otherwise any—
(i) Discretion granted it under the model;
(ii) Right that it has to satisfy a condition under the model;
(iii) Remedy that it has under the model; or
(iv) Obligation imposed on it under the model.
(2) The IOTA participant must provide CMS 90 days advance written notice of any such proposed transfer.
(3) This obligation remains in effect after the expiration or termination of the model, or the IOTA participant's participation in the model, and until final payment by the IOTA participant under the model has been made.
(4) CMS may condition its consent to such transfer on full or partial reconciliation of upside risk payments and downside risk payments.
(5) Any purported transfer in violation of this requirement is voidable at the discretion of CMS.
§ 512.470   Waivers.
CMS waives the requirements of sections 1881(b), 1833(a) and 1833(b) of the Act only to the extent necessary to make the payments under the IOTA Model described in this subpart.
§ 512.500   Basis and scope of subpart.
(a) Basis. This subpart implements the test of the Transforming Episode Accountability Model (TEAM) under section 1115A(b) of the Act. Except as specifically noted in this part, the regulations under this subpart do not affect the applicability of other provisions affecting providers and suppliers under Medicare FFS, including the applicability of provisions regarding payment, coverage, and program integrity.
(b) Scope. This subpart sets forth the following:
(1) Participation in TEAM.
(2) Scope of episodes being tested.
(3) Pricing methodology.
(4) Quality measures and quality reporting requirements.
(5) Reconciliation and review processes.
(6) Data sharing and other requirements
(7) Financial arrangements and beneficiary incentives.
(8) Medicare program waivers
(9) Beneficiary protections.
(10) Cooperation in model evaluation and monitoring.
(11) Audits and record retention.
(12) Rights in data and intellectual property.
(13) Monitoring and compliance.
(14) Remedial action.
(15) Limitations on review.
(16) Miscellaneous provisions on bankruptcy and other notifications.
(17) Model termination by CMS.
(18) Decarbonization and resilience initiative.
§ 512.505   Definitions.
For the purposes of this part, the following definitions are applicable unless otherwise stated:
AAPM stands for Advanced Alternative Payment Model.
AAPM option means the advanced alternative payment model option of TEAM for Track 2 and Track 3 TEAM participants that provide their CMS EHR Certification ID and attest to their use of CEHRT in accordance with § 512.522.
ACO means an accountable care organization, as defined at § 425.20 of this chapter.
ACO participant has the meaning set forth in § 425.20 of this chapter.
ACO provider/supplier has the meaning set forth in § 425.20 of this chapter.
Acute care hospital means a provider subject to the prospective payment system specified in § 412.1(a)(1) of this chapter.
Age bracket risk adjustment factor means the coefficient of risk associated with a patient's age bracket, calculated as described in § 512.545(a)(1).
Aggregated reconciliation target price refers to the sum of the reconciliation target prices for all episodes attributed to a given TEAM participant for a given performance year.
Alignment payment means a payment from a TEAM collaborator to a TEAM participant under a sharing arrangement, for the sole purpose of sharing the TEAM participant's responsibility for making repayments to Medicare.
AMI stands for acute myocardial infarction
Anchor hospitalization means the initial hospital stay upon admission for an episode category included in TEAM, as described in § 512.525(c), for which the institutional claim is billed through the inpatient prospective payment system (IPPS).
Anchor procedure means a procedure related to an episode category, as described in § 512.525(c), included in TEAM that is permitted and paid for by Medicare when performed in a hospital outpatient department (HOPD) and billed through the Hospital Outpatient Prospective Payment System (OPPS).
ADI stands for Area Deprivation Index.
APM stands for Alternative Payment Model.
APM Entity means an entity as defined in § 414.1305 of this chapter.
Baseline episode spending refers to total episode spending by all providers and suppliers associated with a given MS-DRG/HCPCS episode type for all hospitals in a given region during the baseline period.
Baseline period means the 3-year historical period used to construct the preliminary target price and reconciliation target price for a given performance year.
Baseline year means any one of the 3 years included in the baseline period.
Benchmark price means average standardized episode spending by all providers and suppliers associated with a given MS-DRG/HCPCS episode type for all hospitals in a given region during the applicable baseline period.
Beneficiary means an individual who is enrolled in Medicare FFS.
Beneficiary who is dually eligible means a beneficiary enrolled in both Medicare and full Medicaid benefits.
BPCI stands for Bundled Payments for Care Improvement, which was an episode_based payment initiative with four models tested by the CMS Innovation Center from April 2013 to September 2018.
BPCI Advanced stands for the Bundled Payments for Care Improvement Advanced Model, which is an episode-based payment model tested by the CMS Innovation Center from October 2018 to December 2025.
CABG (Coronary Artery Bypass Graft Surgery) means any coronary revascularization procedure paid through the IPPS under MS-DRGs 231-236, including both elective CABG and CABG procedures performed during initial acute myocardial infarction (AMI) treatment.
CCN stands for CMS certification number.
CEHRT means certified electronic health record technology that meets the requirements set forth in § 414.1305 of this chapter.
Change in control means any of the following:
(1) The acquisition by any “person” (as this term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934), directly or indirectly, of voting securities of the TEAM participant representing more than 50 percent of the TEAM participant's outstanding voting securities or rights to acquire such securities.
(2) The acquisition of the TEAM participant by any individual or entity.
(3) The sale, lease, exchange, or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the TEAM participant.
(4) The approval and completion of a plan of liquidation of the TEAM participant, or an agreement for the sale or liquidation of the TEAM participant.
CJR stands for the Comprehensive Care for Joint Replacement Model, which is an episode-based payment model tested by the CMS Innovation Center from April 2016 to December 2024.
Clinician engagement list means the list of eligible clinicians or MIPS eligible clinicians that participate in TEAM activities and have a contractual relationship with the TEAM participant, and who are not listed on the financial arrangements list, as described in § 512.522(c).
CMS Electronic Health Record (EHR) Certification ID means the identification number that represents the combination of Certified Health Information Technology that is owned and used by providers and hospitals to provide care to their patients and is generated by the Certified Health Information Technology Product List.
Collaboration agent means an individual or entity that is not a TEAM collaborator and that is either of the following:
(1) A member of a PGP, NPPGP, or TGP that has entered into a distribution arrangement with the same PGP, NPPGP, or TGP in which he or she is an owner or employee, and where the PGP, NPPGP, or TGP is a TEAM collaborator.
(2) An ACO participant or ACO provider/supplier that has entered into a distribution arrangement with the same ACO in which it is participating, and where the ACO is a TEAM collaborator.
Composite quality score (CQS) means a score computed for each TEAM participant to summarize the TEAM participant's level of quality performance and improvement on specified quality measures as described in § 512.547.
Core-based statistical area (CBSA) means a statistical geographic entity defined by the Office of Management and Budget (OMB) consisting of the county or counties associated with at least one core (urbanized area or urban cluster) of at least 10,000 population, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties with the counties containing the core.
CORF stands for comprehensive outpatient rehabilitation facility.
Covered services means the scope of health care benefits described in sections 1812 and 1832 of the Act for which payment is available under Part A or Part B of Title XVIII of the Act.
Critical access hospital (CAH) means a hospital designated under subpart F of part 485 of this chapter.
CQS adjustment amount means the amount subtracted from the positive or negative reconciliation amount to generate the reconciliation payment or repayment amount.
CQS adjustment percentage means the percentage CMS applies to the positive or negative reconciliation amount based on the TEAM participant's CQS performance.
CQS baseline period means the time period used to benchmark quality measure performance.
Days means calendar days.
Decarbonization and Resilience Initiative means an initiative for TEAM participants that includes technical assistance on decarbonization and a voluntary reporting program where TEAM participants may annually report metrics and questions related to emissions in accordance with § 512.598.
Descriptive TEAM materials and activities means general audience materials such as brochures, advertisements, outreach events, letters to beneficiaries, web pages, mailings, social media, or other materials or activities distributed or conducted by or on behalf of the TEAM participant or its downstream participants when used to educate, notify, or contact beneficiaries regarding TEAM. All of the following communications are not descriptive TEAM materials and activities:
(1) Communications that do not directly or indirectly reference TEAM (for example, information about care coordination generally).
(2) Information on specific medical conditions.
(3) Referrals for health care items and services, except as required by § 512.564.
(4) Any other materials that are excepted from the definition of “marketing” as that term is defined at 45 CFR 164.501.
Discount factor means a set percentage included in the preliminary target price and reconciliation target price intended to reflect Medicare's potential savings from TEAM.
Distribution arrangement means a financial arrangement between a TEAM collaborator that is an ACO, PGP, NPPGP, or TGP and a collaboration agent for the sole purpose of distributing some or all of a gainsharing payment received by the ACO, PGP, NPPGP, or TGP.
Distribution payment means a payment from a TEAM collaborator that is an ACO, PGP, NPPGP, or TGP to a collaboration agent, under a distribution arrangement, composed only of gainsharing payments.
DME stands for durable medical equipment.
Downstream collaboration agent means an individual who is not a TEAM collaborator or a collaboration agent and who is a member of a PGP, NPPGP, or TGP that has entered into a downstream distribution arrangement with the same PGP, NPPGP, or TGP in which he or she is an owner or employee, and where the PGP, NPPGP, or TGP is a collaboration agent.
Downstream distribution arrangement means a financial arrangement between a collaboration agent that is both a PGP, NPPGP, or TGP and an ACO participant and a downstream collaboration agent for the sole purpose of sharing a distribution payment received by the PGP, NPPGP, or TGP.
Downstream participant means an individual or entity that has entered into a written arrangement with a TEAM participant, TEAM collaborator, collaboration agent, or downstream collaboration agent under which the downstream participant engages in one or more TEAM activities.
EHR stands for electronic health record.
Eligible clinician means a clinician as defined in § 414.1305 of this chapter.
Episode category means one of the five episodes tested in TEAM as described at § 512.525(d).
Episode means all Medicare Part A and B items and services described in § 512.525(e) (and excluding the items and services described in § 512.525(f)) that are furnished to a beneficiary described in § 512.535 during the time period that begins on the date of the beneficiary's admission to an anchor hospitalization or the date of the anchor procedure, as described at § 512.525(c), and ends on the 30th day following the date of discharge from the anchor hospitalization or anchor procedure, with the date of discharge or date of the anchor procedure itself being counted as the first day in the 30-day post-discharge period, as described at § 512.537. If an anchor hospitalization is initiated on the same day as or in the 3 days following an outpatient procedure that could initiate an anchor procedure for the same episode category, the outpatient procedure initiates an anchor hospitalization and the anchor hospitalization start date is that of the outpatient procedure.
Essential access community hospital means a hospital as defined under § 412.109 of this chapter.
Final normalization factor refers to the national mean of the benchmark price for each MS-DRG/HCPCS episode type divided by the national mean of the risk-adjusted benchmark price for the same MS-DRG/HCPCS episode type.
Financial arrangements list means the list of eligible clinicians or MIPS eligible clinicians that have a financial arrangement with the TEAM participant, TEAM collaborator, collaboration agent, and downstream collaboration agent, as described in § 512.522(b).
Gainsharing payment means a payment from a TEAM participant to a TEAM collaborator, under a sharing arrangement, composed of only reconciliation payments, internal cost savings, or both.
HCPCS stands for Healthcare Common Procedure Coding System, which is used to bill for items and services.
Health disparities mean preventable differences in the burden of disease, injury, violence, or opportunities to achieve optimal health, health quality, or health outcomes that are experienced by one or more underserved communities within the TEAM participant's population of TEAM beneficiaries that the TEAM participant will aim to reduce.
Health equity goal means a targeted outcome relative to health equity plan performance measures.
Health equity plan means a document that identifies health equity goals, intervention strategies, and performance measures to improve health disparities identified within the TEAM participant's population of TEAM beneficiaries that the TEAM participant will aim to reduce as described in § 512.563.
Health equity plan intervention strategy means the initiative the TEAM participant creates and implements to reduce the identified health disparities as part of the health equity plan.
Health equity plan performance measure means a quantitative metric that the TEAM participant uses to measure changes in health disparities arising from the health equity plan intervention strategies.
Health-related social need means an unmet, adverse social condition that can contribute to poor health outcomes and is a result of underlying social determinants of health, which refer to the conditions in the environments where people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks.
HHA means a Medicare-enrolled home health agency.
High-cost outlier cap refers to the 99th percentile of regional spending for a given MS-DRG/HCPCS episode type in a given region, which is the amount at which episode spending would be capped for purposes of determining baseline and performance year episode spending.
Hospital means a hospital as defined in section 1886(d)(1)(B) of the Act.
Hospital discharge planning means the standards set forth in § 482.43 of this chapter.
ICD-CM stands for International Classification of Diseases, Clinical Modification.
Internal cost savings means the measurable, actual, and verifiable cost savings realized by the TEAM participant resulting from care redesign undertaken by the TEAM participant in connection with providing items and services to TEAM beneficiaries within an episode. Internal cost savings does not include savings realized by any individual or entity that is not the TEAM participant.
IPF stands for inpatient psychiatric facility.
IPPS stands for Inpatient Prospective Payment System, which is the payment system for subsection (d) hospitals as defined in section 1886(d)(1)(B) of the Act.
IRF stands for inpatient rehabilitation facility.
LIS stands for Medicare Part D Low-Income Subsidy.
Lower-Extremity Joint Replacement (LEJR) means any hip, knee, or ankle replacement that is paid under MS-DRG 469, 470, 521, or 522 through the IPPS or HCPCS code 27447, 27130, or 27702 through the OPPS.
LTCH stands for long-term care hospital.
Major Bowel Procedure means any small or large bowel procedure paid through the IPPS under MS-DRG 329-331.
Mandatory CBSA means a core-based statistical area selected by CMS in accordance with § 512.515 where all eligible hospitals are required to participate in TEAM.
MDC stands for Major Diagnostic Category.
Medically necessary means reasonable and necessary for the diagnosis or treatment of an illness or injury, or to improve the functioning of a malformed body member.
Medicare Severity Diagnosis-Related Group (MS-DRG) means, for the purposes of this model, the classification of inpatient hospital discharges updated in accordance with § 412.10 of this chapter.
Medicare-dependent, small rural hospital (MDH) means a specific type of hospital that meets the classification criteria specified under § 412.108 of this chapter.
Member of the NPPGP or NPPGP member means a nonphysician practitioner or therapist who is an owner or employee of an NPPGP and who has reassigned to the NPPGP his or her right to receive Medicare payment.
Member of the PGP or PGP member means a physician, nonphysician practitioner, or therapist who is an owner or employee of the PGP and who has reassigned to the PGP his or her right to receive Medicare payment.
Member of the TGP or TGP member means a therapist who is an owner or employee of a TGP and who has reassigned to the TGP his or her right to receive Medicare payment.
MIPS stands for Merit-based Incentive Payment System.
MIPS eligible clinician means a clinician as defined in § 414.1305 of this chapter.
Model performance period means the 60-month period from January 1, 2026, to December 31, 2030, during which TEAM is being tested and the TEAM participant is held accountable for spending and quality.
Model start date means January 1, 2026, the start of the model performance period.
MS-DRG/HCPCS episode type refers to the subset of episodes within an episode category that are associated with a given MS-DRG/HCPCS, as set forth at § 512.540(a)(1).
Non-AAPM option means the option of TEAM for TEAM participants in Track 1 or for TEAM participants in Track 2 or Track 3 that do not attest to use of CEHRT as described in § 512.522.
Nonphysician practitioner means one of the following:
(1) A physician assistant who satisfies the qualifications set forth at § 410.74(a)(2)(i) and (ii) of this chapter.
(2) A nurse practitioner who satisfies the qualifications set forth at § 410.75(b) of this chapter.
(3) A clinical nurse specialist who satisfies the qualifications set forth at § 410.76(b) of this chapter.
(4) A certified registered nurse anesthetist (as defined at § 410.69(b) of this chapter).
(5) A clinical social worker (as defined at § 410.73(a) of this chapter).
(6) A registered dietician or nutrition professional (as defined at § 410.134 of this chapter).
NPI stands for National Provider Identifier.
NPPGP stands for Non-Physician Provider Group Practice, which means an entity that is enrolled in Medicare as a group practice, includes at least one owner or employee who is a nonphysician practitioner, does not include a physician owner or employee, and has a valid and active TIN.
NPRA stands for Net Payment Reconciliation Amount, which means the dollar amount representing the difference between the reconciliation target price and performance year spending, after adjustments for quality and stop-gain/stop-loss limits, but prior to the post-episode spending adjustment.
OIG stands for the Department of Health and Human Services Office of the Inspector General.
OP means an outpatient procedure for which the institutional claim is billed by the hospital through the OPPS.
OPPS stands for the Outpatient Prospective Payment System.
PAC stands for post-acute care.
PBPM stands for per-beneficiary-per-month.
Performance year means a 12-month period beginning on January 1 and ending on December 31 of each year during the model performance period.
Performance year spending means the sum of standardized Medicare claims payments during the performance year for the items and services that are included in the episode in accordance with § 512.525(e), excluding the items and services described in § 512.525(f).
PGP stands for physician group practice.
Physician has the meaning set forth in section 1861(r) of the Act.
Post-episode spending amount means the sum of all Medicare Parts A and B payments for items and services furnished to a beneficiary within 30 days after the end of an episode and includes the prorated portion of services that began during the episode and extended into the 30-day post-episode period.
Preliminary target price refers to the target price provided to the TEAM participant prior to the start of the performance year, which is subject to adjustment at reconciliation, as set forth at § 512.540.
Primary care services has the meaning set forth in section 1842(i)(4) of the Act.
Prospective normalization factor refers to the multiplier incorporated into the preliminary target price to ensure that the average of the total risk-adjusted preliminary target price does not exceed the average of the total non-risk adjusted preliminary target price, calculated as set forth in § 512.540(b)(6).
Prospective trend factor refers to the multiplier incorporated into the preliminary target price to estimate changes in spending patterns between the baseline period and the performance year, calculated as set forth in § 512.540(b)(7).
Provider means a “provider of services” as defined under section 1861(u) of the Act and codified in the definition of “provider” at § 400.202 of this chapter.
Provider of outpatient therapy services means an entity that is enrolled in Medicare as a provider of therapy services and furnishes one or more of the following:
(1) Outpatient physical therapy services as defined in § 410.60 of this chapter.
(2) Outpatient occupational therapy services as defined in § 410.59 of this chapter.
(3) Outpatient speech-language pathology services as defined in § 410.62 of this chapter.
QP stands for Qualifying APM Participant as defined in § 414.1305 of this chapter.
Quality-adjusted reconciliation amount refers to the dollar amount representing the difference between the reconciliation target price and performance year spending, after adjustments for quality, but prior to application of stop-gain/stop-loss limits and the post-episode spending adjustment.
Raw quality measure score means the quality measure value as obtained from the Hospital Inpatient Quality Reporting Program and the Hospital-Acquired Condition Reduction Program.
Reconciliation amount means the dollar amount representing the difference between the reconciliation target price and performance year spending, prior to adjustments for quality, stop-gain/stop-loss limits, and post-episode spending.
Reconciliation payment amount means the amount that CMS may owe to a TEAM participant after reconciliation as determined in accordance with § 512.550(g).
Reconciliation target price means the target price applied to an episode at reconciliation, as determined in accordance with § 512.545.
Region means one of the nine U.S. census divisions, as defined by the U.S. Census Bureau.
Reorganization event refers to a merger, consolidation, spin off or other restructuring that results in a new hospital entity under a given CCN.
Repayment amount means the amount that the TEAM participant may owe to Medicare after reconciliation as determined in accordance with § 512.550(g).
Retrospective trend factor refers to the multiplier incorporated into the reconciliation target price to estimate realized changes in spending patterns during the performance year, calculated as set forth in § 512.545(f).
Rural hospital means an IPPS hospital that meets one of the following criteria:
(1) Is located in a rural area as defined under § 412.64 of this chapter.
(2) Is located in a rural census tract defined under § 412.103(a)(1) of this chapter.
Safety Net hospital means an IPPS hospital that meets at least one of the following criteria:
(1) Exceeds the 75th percentile of the proportion of Medicare beneficiaries considered dually eligible for Medicare and Medicaid across all PPS acute care hospitals in the baseline period.
(2) Exceeds the 75th percentile of the proportion of Medicare beneficiaries partially or fully eligible to receive Part D low-income subsidies across all PPS acute care hospitals in the baseline period.
Scaled quality measure score means the score equal to the percentile to which the TEAM participant's raw quality measure score would have belonged in the CQS baseline period.
Sharing arrangement means a financial arrangement between a TEAM participant and a TEAM collaborator for the sole purpose of making gainsharing payments or alignment payments under TEAM.
SNF stands for skilled nursing facility.
Sole community hospital (SCH) means a hospital that meets the classification criteria specified in § 412.92 of this chapter.
Spinal Fusion means any cervical, thoracic, or lumbar spinal fusion procedure paid through the IPPS under MS-DRG 402, 426, 427, 428, 429, 430, 447, 448, 450, 451, 471, 472, or 473, or through the OPPS under HCPCS codes 22551, 22554, 22612, 22630, or 22633.
Supplier means a supplier as defined in section 1861(d) of the Act and codified at § 400.202 of this chapter.
Surgical Hip and Femur Fracture Treatment (SHFFT) means a hip fixation procedure, with or without fracture reduction, but excluding joint replacement, that is paid through the IPPS under MS-DRGs 480-482.
TAA stands for total ankle arthroplasty.
TEAM activities mean any activity related to promoting accountability for the quality, cost, and overall care for TEAM beneficiaries and performance in the model, including managing and coordinating care; encouraging investment in infrastructure and redesigned care processes for high quality and efficient service delivery; or carrying out any other obligation or duty under the model.
TEAM beneficiary means a beneficiary who meets the beneficiary inclusion criteria in § 512.535 and who is in an episode.
TEAM collaborator means an ACO or one of the following Medicare-enrolled individuals or entities that enters into a sharing arrangement:
(1) SNF.
(2) HHA.
(3) LTCH.
(4) IRF.
(5) Physician.
(6) Nonphysician practitioner.
(7) Therapist in private practice.
(8) CORF.
(9) Provider of outpatient therapy services.
(10) PGP.
(11) Hospital.
(12) CAH.
(13) NPPGP.
(14) Therapy Group Practice (TGP).
TEAM data sharing agreement means an agreement entered into between the TEAM participant and CMS that includes the terms and conditions for any beneficiary-identifiable data shared with the TEAM participant under § 512.562.
TEAM HCC count refers to the TEAM Hierarchical Condition Category count, which is a categorical risk adjustment variable designed to reflect a beneficiary's overall health status during a lookback period by grouping similar diagnoses into one related category and counting the total number of diagnostic categories that apply to the beneficiary.
TEAM participant means an acute care hospital that either—
(1) Initiates episodes and is paid under the IPPS with a CCN primary address located in one of the mandatory CBSAs selected for participation in TEAM in accordance with § 512.515; or
(2) Makes a voluntary opt-in participation election to participate in TEAM in accordance with § 512.510 and is accepted to participate in TEAM by CMS.
TEAM payment means a payment made by CMS only to TEAM participants, or a payment adjustment made only to payments made to TEAM participants, under the terms of TEAM that is not applicable to any other providers or suppliers.
TEAM reconciliation report means the report prepared after each reconciliation that CMS provides to the TEAM participant notifying the TEAM participant of the outcome of the reconciliation.
TGP or therapy group practice means an entity that is enrolled in Medicare as a therapy group in private practice, includes at least one owner or employee who is a therapist in private practice, does not include an owner or employee who is a physician or nonphysician practitioner, and has a valid and active TIN.
THA means total hip arthroplasty.
Therapist means one of the following individuals as defined at § 484.4 of this chapter:
(1) Physical therapist.
(2) Occupational therapist.
(3) Speech-language pathologist.
Therapist in private practice means a therapist that—
(1) Complies with the special provisions for physical therapists in private practice in § 410.60(c) of this chapter;
(2) Complies with the special provisions for occupational therapists in private practice in § 410.59(c) of this chapter; or
(3) Complies with the special provisions for speech-language pathologists in private practice in § 410.62(c) of this chapter.
TIN stands for taxpayer identification number.
TKA stands for total knee arthroplasty.
Track 1 means a participation track in TEAM in which any TEAM participant may participate for the first performance year and only TEAM participants who are a safety net hospital, as defined in § 512.505, may participate for performance years 1 through 3 of the model. TEAM participants in Track 1 are subject to all of the following:
(1) CQS adjustment percentage described in § 512.550(d)(1)(i).
(2) Limitations on gain described in § 512.550(e)(2).
(3) The calculation of the reconciliation payment described in § 512.550(g).
Track 2 means a participation track in TEAM in which certain TEAM participants, as described in § 512.520(b)(4), may request to participate in for performance years 2 through 5. TEAM participants in Track 2 are subject to all of the following:
(1) CQS adjustment percentage described in § 512.550(d)(1)(ii).
(2) Limitations on gain and loss described in § 512.550(e)(2) and § 512.550(e)(3).
(3) The calculation of the reconciliation payment or repayment amount described in § 512.550(g).
Track 3 means a participation track in TEAM in which a TEAM participant may participate in for performance years 1 through 5. TEAM participants in Track 3 are subject to all of the following:
(1) CQS adjustment percentage described in § 512.550(d)(1)(iii).
(2) Limitations on loss and gain described in § 512.550(e)(1) and in § 512.550(e)(2).
(3) The calculation of the reconciliation payment or repayment amount described in § 512.550(g).
Underserved community means a population sharing a particular characteristic, including geography, that has been systematically denied a full opportunity to participate in aspects of economic, social, and civic life.
U.S. Territories means American Samoa, the Federated States of Micronesia, Guam, the Marshall Islands, and the Commonwealth of the Northern Mariana Islands, Palau, Puerto Rico, U.S. Minor Outlying Islands, and the U.S. Virgin Islands.
Weighted scaled score means the scaled quality measure score multiplied by its normalized weight.
§ 512.510   Voluntary opt-in participation.
(a) General. Hospitals that wish to voluntarily opt-in to TEAM for the full duration of the model performance period must submit a written participation election letter as described in paragraph (d) of this section during the voluntary participation election period specified in paragraph (c) of this section.
(b) Eligibility. A hospital must not be located in a mandatory CBSA selected for TEAM participation, in accordance with § 512.515, and must satisfy one of the following criteria to be eligible for voluntary opt-in participation election—
(1) Be a participant hospital in the CJR model that participates in CJR until the last day of the last performance year, December 31, 2024; or
(2) Be a hospital participating in the BPCI Advanced model, either as a participant or downstream episode initiator, that participates in BPCI Advanced until the last day of the last performance period, December 31, 2025.
(c) Voluntary participation election period. The voluntary participation election period begins on January 1, 2025 and ends on January 31, 2025.
(d) Voluntary participation election letter. The voluntary participation election letter serves as the model participation agreement. CMS may accept the voluntary participation election letter if the letter meets all of the following criteria:
(1) Includes all of the following:
(i) Hospital name.
(ii) Hospital address.
(iii) Hospital CCN.
(iv) Hospital contact name, telephone number, and email address.
(v) Model name (TEAM).
(2) Includes a certification that the hospital will—
(i) Comply with all applicable requirements of this part and all other laws and regulations applicable to its participation in TEAM; and
(ii) Submit data or information to CMS that is accurate, complete and truthful, including, but not limited to, the participation election letter and any other data or information that CMS uses for purposes of TEAM.
(3) Is signed by the hospital administrator, chief financial officer, or chief executive officer with authority to bind the hospital.
(4) Is submitted in the form and manner specified by CMS.
(e) CMS rejection of participation letter. CMS may reject a participation election letter for reasons including, but not limited to, program integrity concerns or ineligibility, and notifies the hospital of the rejection within 30 days of the determination.
§ 512.515   Geographic areas.
(a) General. CMS uses stratified random sampling to select the mandatory CBSAs included in TEAM.
(b) Exclusions. CMS excludes from the selection of geographic areas CBSAs that meet any of the following criteria:
(1) Are located entirely in the State of Maryland.
(2) Are located partially in Maryland, and in which more than 50 percent of the five episode categories tested in TEAM were initiated at a Maryland hospital between January 1, 2022 and June 30, 2023.
(3) Did not have at least one episode for at least one of the five episode categories tested in TEAM between January 1, 2022 and June 30, 2023.
(c) Stratification. (1) Based on the median for each of the following four metrics, CMS designates the CBSAs that are not excluded in accordance with paragraph (b) of this section as “high” and “low”:
(i) Average episode spend for a broad set of episode categories tested in the BPCI Advanced Model, as described in § 512.505, between January 1, 2022 and June 30, 2023.
(ii) Number of acute care hospitals paid under the IPPS between January 1, 2022 and June 30, 2023.
(iii) Past exposure to CMS' bundled payment models, which are Bundled Payments for Care Improvement (BPCI) Models 2, 3, and 4, as described in § 512.505, Comprehensive Care for Joint Replacement (CJR) as described in § 512.505, or BPCI Advanced between October 1, 2013 and December 31, 2022.
(iv) Number of Safety Net hospitals in 2022 that have initiated at least one episode between January 1, 2022 and June 30, 2023 for at least one of the five episode categories tested in TEAM.
(2)(i) CMS stratifies the CBSAs into mutually exclusive groups corresponding to the 16 unique combinations of these “high” and “low” designations.
(ii) CMS assigns selection probabilities ranging from 20 percent to 33.3 percent to each of the 16 strata, with a higher selection probability for strata containing CBSAs with a high number of safety net hospitals or low past exposure to bundles and a lower selection probability for all other strata.
(3)(i) CMS recategorizes outlier CBSAs in these 16 strata with a very high number of safety net hospitals into a 17th stratum.
(ii) CMS assigns a selection probability of 50 percent to the 17th stratum.
(4)(i) CMS recategorizes CBSAs still remaining in the first 16 strata with at least one hospital participating in BPCI Advanced or CJR as of January 1, 2024 or those located in the states of Vermont, Connecticut, or Hawaii into an 18th stratum.
(ii) CMS assigns a selection probability of 20 percent to the 18th stratum.
(d) Random selection into TEAM. CMS randomly selects mandatory CBSAs into TEAM from each of the 18 strata according to selection probabilities described in paragraph (c) of this section.
§ 512.520   Participation tracks.
(a) For performance year 1: (1) Any TEAM participant may choose to participate in Track 1 or Track 3.
(2) The TEAM participant must notify CMS of its track choice, prior to performance year 1, in a form and manner and by a date specified by CMS.
(3) CMS assigns the TEAM participant to Track 1 for performance year 1 if a TEAM participant does not choose a track in the form and manner and by the date specified by CMS.
(b) For performance years 2 through 5: (1) CMS assigns a TEAM participant to participate in Track 3 unless the TEAM participant requests to participate in Track 1 or Track 2 and receives approval from CMS to participate in Track 1 or Track 2, with the exception that a TEAM participant cannot request participation in Track 1 for performance years 4 and 5.
(2) The TEAM participant must notify CMS of its Track 1 or Track 2 request prior to performance year 2, and prior to every performance year thereafter, as applicable, in a form and manner and by a date specified by CMS.
(3) CMS does not approve a TEAM participant's request to participate in Track 1 submitted in accordance with paragraph (b)(2) of this section unless the TEAM participant is a safety net hospital, as defined in § 512.505, at the time of the request.
(4) CMS does not approve a TEAM participant's request to participate in Track 2 submitted in accordance with paragraph (b)(2) of this section unless the TEAM participant is one of the following hospital types at the time of the request:
(i) Medicare-dependent hospital (as defined in § 512.505).
(ii) Rural hospital (as defined in § 512.505).
(iii) Safety Net hospital (as defined in § 512.505).
(iv) Sole community hospital (as defined in § 512.505).
(v) Essential access community hospital (as defined in § 512.505).
(5) A TEAM participant who does not notify CMS of its Track 1 or Track 2 request prior to a given performance year in the form and manner and by the date specified by CMS or who is not a safety net hospital, as defined as defined in § 512.505, or one of the hospital types specified in paragraph (b)(4) of this section at the time of the request is assigned to Track 3 for the applicable performance year.
§ 512.522   APM options.
(a) TEAM APM options. For performance years 1 through 5, a TEAM participant may choose either of the following options based on their CEHRT use and track participation:
(1) AAPM option. A TEAM participant participating in Track 2 or Track 3 may select the AAPM option by attesting in a form and manner and by a date specified by CMS to their use of CEHRT, as defined in § 414.1305 of this chapter, on an annual basis prior to the start of each performance year.
(i) A TEAM participant that selects the AAPM option as provided for in paragraph (a)(1) must provide their CMS electronic health record certification ID in a form and manner and by a date specified by CMS on annual basis prior to the end of each performance year.
(ii) A TEAM participant that selects the AAPM option as provided for in paragraph (a)(1) must retain documentation of their attestation to CEHRT use and provide access to the documentation in accordance with § 512.586.
(2) Non-AAPM option. CMS assigns the TEAM participant to the non-AAPM option if the TEAM participant is in Track 1 or if the TEAM participant is in Track 2 or Track 3 and does not attest in a form and manner and by a date specified by CMS to their use of CEHRT as defined in § 414.1305 of this chapter.
(b) Financial arrangements list. A TEAM participant with TEAM collaborators, collaboration agents, or downstream collaboration agents during a performance year must submit to CMS a financial arrangements list in a form and manner and by a date specified by CMS on a quarterly basis for each performance year. The financial arrangements list must include the following:
(1) TEAM collaborators. For each physician, nonphysician practitioner, or therapist who is a TEAM collaborator during the performance year:
(i) The name, TIN, and NPI of the TEAM collaborator.
(ii) The start date and, if applicable, end date, for the sharing arrangement between the TEAM participant and the TEAM collaborator.
(2) Collaboration agents. For each physician, nonphysician practitioner, or therapist who is a collaboration agent during the performance year:
(i) The name, TIN, and NPI of the collaboration agent and the name and TIN of the TEAM collaborator with which the collaboration agent has entered into a distribution arrangement.
(ii) The start date and, if applicable, end date, for the distribution arrangement between the TEAM collaborator and the collaboration agent.
(3) Downstream collaboration agents. For each physician, nonphysician practitioner, or therapist who is a downstream collaboration agent during the performance year:
(i) The name, TIN, and NPI of the downstream collaboration agent and the name and TIN of the collaboration agent with which the downstream collaboration agent has entered into a downstream distribution arrangement.
(ii) The start date and, if applicable, end date, for the downstream distribution arrangement between the collaboration agent and the downstream collaboration agent.
(c) Clinician engagement list. A TEAM participant must submit to CMS a clinician engagement list in a form and manner and by a date specified by CMS on a quarterly basis during each performance year. The clinician engagement list must include the following:
(1) For each physician, nonphysician practitioner, or therapist who is not on a TEAM participant's financial arrangements list during the performance year but who does have a contractual relationship with the TEAM participant and participates in TEAM activities during the performance year:
(i) The name, TIN, and NPI of the physician, nonphysician practitioner, or therapist.
(ii) The start date and, if applicable, the end date for the contractual relationship between the physician, nonphysician practitioner, or therapist and the TEAM participant.
(d) Attestation to no individuals. A TEAM participant with no individuals that meet the criteria specified in paragraphs (b)(1) through (3) of this section for the financial arrangements list or paragraph (c) of this section for the clinician engagement list must attest in a form and manner and by a date specified by CMS that there are no financial arrangements or clinician engagements to report.
(e) Documentation requirements. A TEAM participant that submits a financial arrangements list specified in paragraph (b) of this section or a clinician engagement list specified in paragraph (c) of this section must retain and provide access to the documentation in accordance with § 512.586.
§ 512.525   Episodes.
(a) Time periods. All episodes must begin on or after January 1, 2026 and end on or before December 31, 2030.
(b) Episode attribution. All items and services included in the episode are attributed to the TEAM participant at which the anchor hospitalization or anchor procedure, as applicable, occurs.
(c) Episode initiation. An episode is initiated by—
(1) A beneficiary's admission to a TEAM participant for an anchor hospitalization that is paid under a MS-DRG specified in paragraph (d) of this section; or
(2) A beneficiary's receipt of an anchor procedure billed under a HCPCS code specified in paragraph (d) of this section. If an anchor hospitalization is initiated on the same day as or in the 3 days following an outpatient procedure that could initiate an anchor procedure for the same episode category, the episode start date is that of the outpatient procedure rather than the admission date, and an anchor procedure is not initiated.
(d) Episode categories. The MS-DRGs and HCPCS codes included in the episodes are as follows:
(1) Lower Extremity Joint Replacement (LEJR): (i) IPPS discharge under MS-DRG 469, 470, 521, or 522; or
(ii) OPPS claim for HCPCS codes 27447, 27130, or 27702.
(2) Surgical Hip/Femur Fracture Treatment (SHFFT). IPPS discharge under MS-DRG 480 to 482.
(3) Coronary Artery Bypass Graft Surgery (CABG). IPPS discharge under MS-DRG 231 to 236.
(4) Spinal Fusion: (i) IPPS discharge under MS-DRG 402, 426, 427, 428, 429, 430, 447, 448, 450, 451, 471, 472, 473; or
(ii) OPPS claim for HCPCS codes 22551, 22554, 22612, 22630, or 22633.
(5) Major Bowel Procedure. IPPS discharge under MS-DRG 329 to 331.
(e) Included services. All Medicare Part A and B items and services are included in the episode, except as specified in paragraph (f) of this section. These services include, but are not limited to, the following:
(1) Physicians' services.
(2) Inpatient hospital services (including hospital readmissions).
(3) IPF services.
(4) LTCH services.
(5) IRF services.
(6) SNF services.
(7) HHA services.
(8) Hospital outpatient services.
(9) Outpatient therapy services.
(10) Clinical laboratory services.
(11) DME.
(12) Part B drugs and biologicals, except for those excluded under paragraph (f) of this section.
(13) Hospice services.
(14) Part B professional claims dated in the 3 days prior to an anchor hospitalization if a claim for the surgical procedure for the same episode category is not detected as part of the hospitalization because the procedure was performed by the TEAM participant on an outpatient basis, but the patient was subsequently admitted as an inpatient.
(f) Excluded services. The following items, services, and payments are excluded from the episode:
(1) Select items and services considered unrelated to the anchor hospitalization or the anchor procedure for episodes in the baseline period and performance year, including, but not limited to, the following:
(i) Inpatient hospital admissions for MS-DRGs that group to the following categories of diagnoses:
(A) Oncology.
(B) Trauma medical.
(C) Organ transplant.
(D) Ventricular shunt.
(ii) Inpatient hospital admissions that fall into the following Major Diagnostic Categories (MDCs):
(A) MDC 02 (Diseases and Disorders of the Eye).
(B) MDC 14 (Pregnancy, Childbirth, and Puerperium).
(C) MDC 15 (Newborns).
(D) MDC 25 (Human Immunodeficiency Virus).
(2) New technology add-on payments, as defined in part 412, subpart F of this chapter for episodes in the baseline period and performance year.
(3) Transitional pass-through payments for medical devices as defined in § 419.66 of this chapter for episodes initiated in the baseline period and performance year.
(4) Hemophilia clotting factors provided in accordance with § 412.115 of this chapter for episodes in the baseline period and performance year.
(5) Part B payments for low-volume drugs, high-cost drugs and biologicals, and blood clotting factors for hemophilia for episodes in the baseline period and performance year, billed on outpatient, carrier, and DME claims, defined as—
(i) Drug/biological HCPCS codes that are billed in fewer than 31 episodes in total across all episodes in TEAM during the baseline period;
(ii) Drug/biological HCPCS codes that are billed in at least 31 episodes in the baseline period and have a mean cost of greater than $25,000 per episode in the baseline period; and
(iii) HCPCS codes corresponding to clotting factors for hemophilia patients, identified in the quarterly average sales price file for certain Medicare Part B drugs and biologicals as HCPCS codes with clotting factor equal to 1, HCPCS codes for new hemophilia clotting factors not included in the baseline period, and other HCPCS codes identified as hemophilia.
(6) Part B payments for low-volume drugs, high-cost drugs and biologicals, and blood clotting factors for hemophilia for episodes initiated in the performance year, billed on outpatient, carrier, and DME claims, defined as—
(i) Drug/biological HCPCS codes that were not captured in the baseline period and appear in 10 or fewer episodes in the performance year;
(ii) Drug/biological HCPCS codes that were not included in the baseline period, appear in more than 10 episodes in the performance year, and have a mean cost of greater than $25,000 per episode in the performance year; and
(iii) Drug/biological HCPCS codes that were not included in the baseline period, appear in more than 10 episodes in the performance year, have a mean cost of $25,000 or less per episode in the performance year, and correspond to a drug/biological that appears in the baseline period but was assigned a new HCPCS code between the baseline period and the performance year.
(iv) HCPCS codes for new hemophilia clotting factors not included in the baseline period.
(g) TEAM exclusions List. The list of excluded MS-DRGs, MDCs, and HCPCS codes is posted on the CMS website.
(h) Updating the TEAM exclusions list. The list of excluded services is updated through rulemaking to reflect all of the following:
(1) Changes to the MS-DRGs under the IPPS.
(2) Coding changes.
(3) Other issues brought to CMS' attention.
§ 512.535   Beneficiary inclusion criteria.
(a) Episodes tested in TEAM include only those in which care is furnished to beneficiaries who meet all of the following criteria upon admission for an anchor procedure or anchor hospitalization:
(1) Are enrolled in Medicare Parts A and B.
(2) Are not eligible for Medicare on the basis of having end stage renal disease, as described in § 406.13 of this chapter.
(3) Are not enrolled in any managed care plan (for example, Medicare Advantage, health care prepayment plans, or cost-based health maintenance organizations).
(4) Are not covered under a United Mine Workers of America health care plan.
(5) Have Medicare as their primary payer.
(b) The episode is canceled in accordance with § 512.537(b) if at any time during the episode a beneficiary no longer meets all criteria in this section.
§ 512.537   Determination of the episode.
(a) Episode conclusion. (1) An episode ends on the 30th day following the date of the anchor procedure or the date of discharge from the anchor hospitalization, as applicable, with the date of the anchor procedure or the date of discharge from the anchor hospitalization being counted as the first day in the 30-day post-discharge period.
(b) Cancellation of an episode. The episode is canceled and is not included in the reconciliation calculation as specified in § 512.545 if any of the following occur:
(1) The beneficiary ceases to meet any criterion listed in § 512.535.
(2) The beneficiary dies during the anchor hospitalization or the outpatient stay for the anchor procedure.
(3) The episode qualifies for cancellation due to extreme and uncontrollable circumstances. An extreme and uncontrollable circumstance occurs if both of the following criteria are met:
(i) The TEAM participant has a CCN primary address that—
(A) Is located in an emergency area, as those terms are defined in section 1135(g) of the Act, for which the Secretary has issued a waiver under section 1135 of the Act; and
(B) Is located in a county, parish, or tribal government designated in a major disaster declaration or emergency disaster declaration under the Stafford Act.
(ii) The date of admission to the anchor hospitalization or the date of the anchor procedure is during an emergency period (as defined in section 1135(g) of the Act) or in the 30 days before the date that the emergency period (as defined in section 1135(g) of the Act) begins.
§ 512.540   Determination of preliminary target prices.
(a) Preliminary target price application. CMS establishes preliminary target prices for TEAM participants for each performance year of the model as follows:
(1) MS-DRG/HCPCS episode type. CMS uses the MS-DRGs and, as applicable, HCPCS codes specified in § 512.525(d) when calculating the preliminary target prices for each MS-DRG/HCPCS episode type.
(i) CMS determines a separate preliminary target price for each of the 24 MS-DRGs specified in § 512.525(d).
(ii) Preliminary target prices for a subset of the MS-DRGs specified in § 512.525(d) include certain HCPCS codes as follows:
(A) HCPCS 27130 and 27447 are included in MS-DRG 470.
(B) HCPCS 27702 is included in MS-DRG 469.
(C) HCPCS 22551 and 22554 are included in MS-DRG 473.
(D) HCPCS 22612 and 22630 are included in MS-DRG 451.
(E) HCPCS 22633 is included in MS-DRG 402.
(2) Applicable time period for preliminary target prices. CMS calculates preliminary target prices for each MS-DRG/HCPCS episode type and region for each performance year and applies the preliminary target price to each episode based on the episode's date of discharge from the anchor hospitalization or the episode's date of the anchor procedure, as applicable.
(3) Episodes that begin in one performance year and end in the subsequent performance year. CMS applies the preliminary target price to the episode based on the date of discharge from the anchor hospitalization or the date of the anchor procedure, as applicable, but reconciles the episode based on the end date of the episode.
(b) Preliminary target price calculation. (1) CMS calculates preliminary target prices based on average baseline episode spending for the region where the TEAM participant is located.
(i) The region used for calculating the preliminary target price corresponds to the U.S. Census Division associated with the primary address of the CCN of the TEAM participant, and the regional episode spending amount is based on all hospitals in the region, except as specified in § 512.540(b)(1)(ii).
(ii) In cases where a TEAM participant is located in a mandatory CBSA selected for participation in TEAM which spans more than one region, the TEAM participant and all other hospitals in the mandatory CBSA are grouped into the region where the most populous city in the mandatory CBSA is located for pricing and payment calculations.
(2) CMS uses the following baseline periods to determine baseline episode spending:
(i) Performance Year 1: Episodes beginning on January 1, 2022 through December 31, 2024.
(ii) Performance Year 2: Episodes beginning on January 1, 2023 through December 31, 2025.
(iii) Performance Year 3: Episodes beginning on January 1, 2024 through December 31, 2026.
(iv) Performance Year 4: Episodes beginning on January 1, 2025 through December 31, 2027.
(v) Performance Year 5: Episodes beginning on January 1, 2026 through December 31, 2028.
(3) CMS calculates the benchmark price as the weighted average of baseline episode spending, applying the following weights:
(i) Baseline episode spending from baseline year 1 is weighted at 17 percent.
(ii) Baseline episode spending from baseline year 2 is weighted at 33 percent.
(iii) Baseline episode spending from baseline year 3 is weighted at 50 percent.
(4) Exception for high episode spending. CMS applies a high-cost outlier cap to baseline episode spending at the 99th percentile of regional spending for each of the MS-DRG/HCPCS episode types specified in § 512.540(a)(1)(ii).
(5) Exclusion of incentive programs and add-on payments under existing Medicare payment systems. Certain Medicare incentive programs and add-on payments are excluded from baseline episode spending by using, with certain modifications, the CMS Price (Payment) Standardization Detailed Methodology used for the Medicare spending per beneficiary measure in the Hospital Value-Based Purchasing Program.
(6) Prospective normalization factor. Based on the episodes in the most recent calendar year of the baseline period, CMS calculates a prospective normalization factor, which is a multiplier that ensures that the average risk adjusted target price does not exceed the average unadjusted target price, by doing the following:
(i) CMS applies risk adjustment multipliers, as specified in § 512.545(a)(1) through (3), to the most recent baseline year episodes to calculate the estimated risk-adjusted target price for all performance year episodes.
(ii) CMS divides the mean of the preliminary target price for each episode across all hospitals and regions by the mean of the estimated risk-adjusted target price calculated in § 512.540(b)(6)(i) for the same episode types across all hospitals and regions.
(7) Prospective trend factor. CMS calculates the following:
(i) The average regional episode spending for each MS-DRG/HCPCS episode type using the most recent calendar year of the applicable baseline period.
(ii) The difference between the average regional spending for each MS-DRG/HCPCS episode type during the most recent calendar year of the baseline period and the average regional spending for each MS-DRG/HCPCS episode type during the first years of the baseline period to determine the prospective trend factor.
(8) Communication of preliminary target prices. CMS communicates the preliminary target prices for each MS-DRG/HCPCS episode type for each region to the TEAM participant before the performance year in which they apply.
(c) Discount factor. CMS incorporates an episode category specific discount factor of 1.5 percent for CABG and Major Bowel episodes and 2 percent for LEJR, SHFFT, and Spinal Fusion episodes to the TEAM participant's preliminary episode target prices intended to reflect Medicare's potential savings from TEAM.
§ 512.545   Determination of reconciliation target prices.
CMS calculates the reconciliation target price as follows:
(a) CMS risk adjusts the preliminary episode target prices computed under § 512.540 at the beneficiary level using a TEAM Hierarchical Condition Category (HCC) count risk adjustment factor, an age bracket risk adjustment factor, a social need risk adjustment factor, and at the hospital level using a hospital bed size risk adjustment factor and a safety net hospital risk adjustment factor, and at the episode category-specific beneficiary level using factors specified in paragraph (a)(6)(i) through (v) of this section.
(1) The TEAM HCC count risk adjustment factor uses five variables, representing beneficiaries with zero, one, two, three, or four or more CMS-HCC conditions based on a lookback period that ends on the day prior to the anchor hospitalization or anchor procedure.
(2) The age bracket risk adjustment factor uses four variables, representing beneficiaries in the following age groups as of the first day of the episode:
(i) Less than 65 years.
(ii) 65 to less than 75 years.
(iii) 75 years to less than 85 years.
(iv) 85 years or more.
(3) The social need risk adjustment factor uses two variables, representing beneficiaries that, as of the first day of the episode—
(i) Meet one or more of the following measures of social need:
(A) State ADI above the 8th decile.
(B) National ADI above the 80th percentile.
(C) Eligibility for the low-income subsidy.
(D) Eligibility for full Medicaid benefits.
(ii) Do not meet any of the three measures of social need in § 512.545(a)(1)(iii)(A).
(4) The hospital bed size risk adjustment factor uses four variables based on the TEAM participant's characteristics:
(i) 250 beds or fewer.
(ii) 251-500 beds.
(iii) 501-850 beds.
(iv) 850 beds or more.
(5) The safety net hospital risk adjustment factor is based on the TEAM participant meeting the definition of safety net hospital, as defined in § 512.505.
(6) Episode category-specific beneficiary level risk adjustment factors represent the presence or absence in beneficiaries, as of the first day of the episode, of each of the following conditions:
(i) CABG episode category.
(A) Prior post-acute care use.
(B) HCC 18: Diabetes with Chronic Complications.
(C) HCC 46: Severe Hematological Disorders.
(D) HCC 58: Major Depressive, Bipolar, and Paranoid Disorders.
(E) HCC 84: Cardio-Respiratory Failure and Shock.
(F) HCC 85: Congestive Heart Failure.
(G) HCC 86: Acute Myocardial Infarction.
(H) HCC 96: Specified Heart Arrhythmias.
(I) HCC 103: Hemiplegia/Hemiparesis.
(J) HCC 111: Chronic Obstructive Pulmonary Disease.
(K) HCC 112: Fibrosis of Lung and Other Chronic Lung Disorders.
(L) HCC 134: Dialysis Status.
(ii) LEJR episode category.
(A) Ankle procedure or reattachment, partial hip procedure, partial knee arthroplasty, total hip arthroplasty or hip resurfacing procedure, and total knee arthroplasty.
(B) Disability as the original reason for Medicare enrollment.
(C) Dementia without complications.
(D) Prior post-acute care use.
(E) HCC 8: Metastatic Cancer and Acute Leukemia.
(F) HCC 18: Diabetes with Chronic Complications.
(G) HCC 22: Morbid Obesity.
(H) HCC 58: Major Depressive, Bipolar, and Paranoid Disorders.
(I) HCC 78: Parkinson's and Huntington's Diseases.
(J) HCC 85: Congestive Heart Failure.
(K) HCC 86: Acute Myocardial Infarction.
(L) HCC 103: Hemiplegia/Hemiparesis.
(M) HCC 111: Chronic Obstructive Pulmonary Disease.
(N) HCC 112: Fibrosis of Lung and Other Chronic Lung Disorders.
(O) HCC 134: Dialysis Status.
(P) HCC 170: Hip Fracture/Dislocation.
(iii) Major Bowel Procedure episode category.
(A) Long-term institutional care use.
(B) HCC 11: Colorectal, Bladder, and Other Cancers.
(C) HCC 18: Diabetes with Chronic Complications.
(D) HCC 21: Protein-Calorie Malnutrition.
(E) HCC 33: Intestinal Obstruction/Perforation.
(F) HCC 82: Respirator Dependence/Tracheostomy Status.
(G) HCC 85: Congestive Heart Failure.
(H) HCC 86: Acute Myocardial Infarction.
(I) HCC 103: Hemiplegia/Hemiparesis.
(J) HCC 111: Chronic Obstructive Pulmonary Disease.
(K) HCC 112: Fibrosis of Lung and Other Chronic Lung Disorders.
(L) HCC 134: Dialysis Status.
(M) HCC 188: Artificial Openings for Feeding or Elimination.
(iv) SHFFT episode category.
(A) HCC 18: Diabetes with Chronic Complications.
(B) HCC 22: Morbid Obesity.
(C) HCC 82: Respirator Dependence/Tracheostomy Status.
(D) HCC 83: Respiratory Arrest.
(E) HCC 84: Cardio-Respiratory Failure and Shock.
(F) HCC 85: Congestive Heart Failure.
(G) HCC 86: Acute Myocardial Infarction.
(H) HCC 96: Specified Heart Arrhythmias.
(I) HCC 103: Hemiplegia/Hemiparesis.
(J) HCC 111: Chronic Obstructive Pulmonary Disease.
(K) HCC 112: Fibrosis of Lung and Other Chronic Lung Disorders.
(L) HCC 134: Dialysis Status.
(M) HCC 157: Pressure Ulcer of Skin with Necrosis Through to Muscle, Tendon, or Bone.
(N) HCC 158: Pressure Ulcer of Skin with Full Thickness Skin Loss.
(O) HCC 161: Chronic Ulcer of Skin, Except Pressure.
(P) HCC 170: Hip Fracture/Dislocation.
(v) Spinal Fusion episode category.
(A) Prior post-acute care use.
(B) HCC 8: Metastatic Cancer and Acute Leukemia.
(C) HCC 18: Diabetes with Chronic Complications.
(D) HCC 22: Morbid Obesity.
(E) HCC 40: Rheumatoid Arthritis and Inflammatory Connective Tissue Disease.
(F) HCC 58: Major Depressive, Bipolar, and Paranoid Disorders.
(G) HCC 85: Congestive Heart Failure.
(H) HCC 86: Acute Myocardial Infarction.
(I) HCC 96: Specified Heart Arrhythmias.
(J) HCC 103: Hemiplegia/Hemiparesis.
(K) HCC 111: Chronic Obstructive Pulmonary Disease.
(L) HCC 112: Fibrosis of Lung and Other Chronic Lung Disorders.
(M) HCC 134: Dialysis Status.
(b) All risk adjustment factors are computed prior to the start of the performance year via a linear regression analysis. The regression analysis is computed using 3 years of claims data as follows:
(1) For performance year 1, CMS uses claims data with dates of service dated January 1, 2022 to December 31, 2024.
(2) For performance year 2, CMS uses claims data with dates of service dated January 1, 2023 to December 31, 2025.
(3) For performance year 3, CMS uses claims data with dates of service dated January 1, 2024 to December 31, 2026.
(4) For performance year 4, CMS uses claims data with dates of service dated January 1, 2025 to December 31, 2027.
(5) For performance year 5, CMS uses claims data with dates of service dated January 1, 2026 to December 30, 2028.
(c) The annual linear regression analysis produces exponentiated coefficients to determine the anticipated marginal effect of each risk adjustment factor on episode costs. CMS transforms, or exponentiates, these coefficients, and the resulting coefficients are the beneficiary and hospital-level risk adjustment factors, specified in paragraphs (a)(1) through (6) of this section, that would be used during reconciliation for the subsequent performance year.
(d) At the time of reconciliation, the preliminary target prices computed under § 512.540 are risk adjusted by applying the applicable beneficiary level and hospital-level risk adjustment factors specific to the beneficiary in the episode, as set forth in paragraphs (a)(1) through (6) of this section.
(e) The risk-adjusted preliminary target prices are normalized at reconciliation to ensure that the average of the total risk-adjusted preliminary target price does not exceed the average of the total non-risk adjusted preliminary target price.
(1) The final normalization factor at reconciliation—
(i) Is the national mean of the benchmark price for each MS-DRG/HCPCS episode type divided by the national mean of the risk-adjusted benchmark price for the same MS-DRG/HCPCS episode type.
(ii) As applied, cannot exceed ±5 percent of the prospective normalization factor (as specified in § 512.540(b)(6)).
(2) CMS applies the final normalization factor to the previously calculated, beneficiary and provider level, risk-adjusted target prices specific to each region and MS-DRG/HCPCS episode type.
(f) Retrospective trend factor. CMS calculates the average regional capped performance year episode spending for each MS-DRG/HCPCS episode type divided by the average regional capped baseline period episode spending for each MS-DRG/HCPCS episode type.
(1) The retrospective trend factor is capped so that the maximum difference cannot exceed ±3 percent of the prospective trend factor (as specified in § 512.540(b)(7)).
(2) CMS applies the capped retrospective trend factor to the previously calculated normalized, risk adjusted target prices specific to each region and MS-DRG/HCPCS episode type, as specified in paragraph (e)(2) of this section, to calculate the reconciliation target prices, which are compared to performance year spending at reconciliation, as specified in § 512.550(c).
§ 512.547   Quality measures, composite quality score, and display of quality measures.
(a) Quality measures. CMS calculates the quality measures used to evaluate the TEAM participant's performance using Medicare claims data or patient-reported outcomes data that TEAM participants report under the Hospital Inpatient Quality Reporting Program and the Hospital-Acquired Condition Reduction Program. The following quality measures and CQS baseline periods are used for public reporting and for determining the TEAM participant's CQS as described in paragraph (b) of this section:
(1) For performance year 1:
(i) For all episode categories: Hybrid Hospital-Wide All-Cause Readmission Measure with Claims and Electronic Health Record Data (CMIT ID #356) with a CY 2025 CQS baseline period;
(ii) For all episode categories: CMS Patient Safety and Adverse Events Composite (CMS PSI 90) (CMIT ID #135) with a CY 2025 CQS baseline period; and
(iii) For LEJR episodes: Hospital-Level Total Hip and/or Total Knee Arthroplasty (THA/TKA) Patient-Reported Outcome-Based Performance Measure (PRO-PM) (CMIT ID #1618) with a CY 2025 CQS baseline period.
(2) For performance years 2 through 5:
(i) For all episode categories: Hybrid Hospital-Wide All-Cause Readmission Measure with Claims and Electronic Health Record Data (CMIT ID #356) with a CY 2025 CQS baseline period;
(ii) For all episode categories: Hospital Harm—Falls with Injury (CMIT ID #1518) with a CY 2026 CQS baseline period;
(iii) For all episode categories: Hospital Harm—Postoperative Respiratory Failure (CMIT ID #1788) with a CY 2026 CQS baseline period;
(iv) For all episode categories: Thirty-day Risk-Standardized Death Rate among Surgical Inpatients with Complications (Failure-to-Rescue) (CMIT ID #134) with a CY 2026 CQS baseline period; and
(v) For LEJR episodes: Hospital-Level Total Hip and/or Total Knee Arthroplasty (THA/TKA) Patient-Reported Outcome-Based Performance Measure (PRO-PM) (CMIT ID #1618) with a CY 2025 CQS baseline period.
(b) Calculation of the composite quality score (CQS). (1) CMS converts the TEAM participant's raw quality measure score for the performance year into a scaled quality measure score by comparing the raw quality measure score to the distribution of raw quality measure score percentiles among a national cohort of hospitals, consisting of TEAM participants and hospitals not participating in TEAM, in the CQS baseline period.
(i) CMS assigns a scaled quality measure score equal to the percentile to which the TEAM Participant's raw quality measure score would have belonged in the CQS baseline period.
(A) CMS assigns the higher scaled quality measure score if the TEAM participant's raw quality measure score straddles two percentiles in the CQS baseline period.
(B) For the Hospital-Level Total Hip and/or Total Knee Arthroplasty (THA/TKA) Patient-Reported Outcome-Based Performance Measure (PRO-PM) (CMIT ID #1618):
( 1 ) CMS assigns a scaled quality measure score of 100 if the TEAM participant's raw quality measure score is greater than the maximum of the raw quality measure scores in the CQS baseline period.
( 2 ) CMS assigns a scaled quality measure score of 0 if the raw quality measure score is less than the minimum of the raw quality measure scores in the baseline period.
(C) For the Hybrid Hospital-Wide All-Cause Readmission Measure with Claims and Electronic Health Record Data (CMIT ID #356) measure, the CMS Patient Safety and Adverse Events Composite (CMS PSI 90) (CMIT ID #135) measure, the Hospital Harm—Falls with Injury (CMIT ID #1518) measure, the Hospital Harm—Postoperative Respiratory Failure (CMIT ID #1788) measure, and the Thirty-day Risk-Standardized Death Rate among Surgical Inpatients with Complications (Failure-to-Rescue) (CMIT ID #134) measure:
( 1 ) CMS assigns a scaled quality measure score of 0 if the TEAM participant has a raw quality measure score greater than the maximum of the raw quality measure scores in the CQS baseline period.
( 2 ) CMS assigns a scaled quality measure score of 100 if the TEAM participant has a raw quality score less than the minimum of the raw scores in the CQS baseline period.
(D) CMS does not assign a scaled quality measure score if the TEAM participant has no raw quality measure score.
(2) CMS calculates a normalized weight for each quality measure by dividing the TEAM participant's volume of attributed episodes for a given quality measure by the total volume of all the TEAM participant's attributed episodes.
(3) CMS calculates a weighted scaled score for each quality measure by multiplying each quality measure's scaled quality measure score, computed under paragraph (b)(2) of this section, by its normalized weight, computed under paragraph (b)(3) of this section.
(4) CMS sums each quality measure's weighted scaled score, computed under paragraph (b)(4) of this section, to construct the CQS.
(c) Display of quality measures. CMS does all of the following:
(1) Displays quality measure results on the publicly available CMS website that is specific to TEAM, in a form and manner consistent with other publicly reported measures.
(2) Shares quality measures with the TEAM participant prior to display on the CMS website.
(3) Uses the following time periods to share quality measure performance:
(i) Quality measure performance in performance year 1 is reported in 2027.
(ii) Quality measure performance in performance year 2 is reported in 2028.
(iii) Quality measure performance in performance year 3 is reported in 2029.
(iv) Quality measure performance in performance year 4 is reported in 2030.
(v) Quality measure performance in performance year 5 is reported in 2031.
§ 512.550   Reconciliation process and determination of the reconciliation payment or repayment amount.
(a) General. Providers and suppliers furnishing items and services included in the episode bill for such items and services in accordance with existing Medicare rules.
(b) Reconciliation process. Six months after the end of each performance year, CMS does the following:
(1) Performs a reconciliation calculation to establish a reconciliation payment or repayment amount for each TEAM participant.
(2) For TEAM participants that experience a reorganization event in which one or more hospitals reorganize under the CCN of a TEAM participant, performs—
(i) Separate reconciliation calculations for each predecessor TEAM participant for episodes where the anchor hospitalization admission or the anchor procedure occurred before the effective date of the reorganization event; and
(ii) Reconciliation calculations for each new or surviving TEAM participant for episodes where the anchor hospitalization admission or anchor procedure occurred on or after the effective date of the reorganization event.
(c) Calculation of the reconciliation amount. CMS compares the reconciliation target prices described in § 512.545 and the TEAM participant's performance year spending to establish a reconciliation amount for the TEAM participant for each performance year as follows:
(1) CMS determines the performance year spending for each episode included in the performance year (other than episodes that have been canceled in accordance with § 512.537(b)) using claims data that is available 6 months after the end of the performance year.
(2) CMS calculates and applies the high-cost outlier cap for performance year episode spending by applying the calculation described in § 512.540(b)(4) to performance year episode spending.
(3) CMS applies the adjustments specified in § 512.545 to the preliminary target prices computed in accordance with § 512.540 to calculate the reconciliation target prices.
(4) CMS aggregates the reconciliation target prices computed in accordance with paragraph (c)(3) of this section for all episodes included in the performance year (other than episodes that have been canceled in accordance with § 512.537(b)).
(5) CMS subtracts the performance year spending amount determined under paragraph (c)(1-2) of this section from the aggregated reconciliation target price amount determined under paragraph (c)(4) of this section to determine the reconciliation amount.
(d) Calculation of the quality-adjusted reconciliation amount. CMS adjusts the reconciliation amount based on the Composite Quality Score as follows:
(1) CMS calculates a CQS adjustment percentage based on a TEAM participant's CQS, computed in accordance with § 512.547(b).
(i) CMS applies a CQS adjustment percentage up to 10 percent for positive reconciliation amounts for TEAM participants in Track 1.
(ii) CMS applies a CQS adjustment percentage up to 10 percent for positive reconciliation amounts and up to 15 percent for negative reconciliation amounts for TEAM participants in Track 2.
(iii) CMS applies a CQS adjustment percentage up to 10 percent for positive reconciliation amounts and up to 10 percent for negative reconciliation amounts for TEAM participants in Track 3.
(2) CMS multiplies the CQS adjustment percentage, computed under paragraph (d)(1) of this section, by the TEAM participant's positive or negative reconciliation amount calculated in paragraph (c) of this section to construct the CQS adjustment amount.
(3) CMS subtracts the CQS adjustment amount, computed from paragraph (d)(2) of this section, from the positive or negative reconciliation amount calculated in paragraph (c) of this section to construct the quality-adjusted reconciliation amount.
(e) Calculation of the net payment reconciliation amount (NPRA). CMS applies stop-loss and stop gain limits to the quality-adjusted reconciliation amount computed in paragraph (d) of this section to calculate the NPRA as follows:
(1) Limitation on loss. For TEAM participants in Track 3, except as provided in paragraph (e)(3) of this section, the repayment amount for a performance year cannot exceed 20 percent of the aggregated reconciliation target price amount calculated in paragraph (c)(3) of this section for the performance year. The post-episode spending calculation amount in paragraph (f) of this section is not subject to the limitation on loss.
(2) Limitation on gain. (i) For TEAM participants in Track 1, the reconciliation payment amount for a performance year cannot exceed 10 percent of the aggregated reconciliation target price amount calculated in accordance with paragraph (c)(3) of this section for the performance year.
(ii) For TEAM participants in Tracks 2, the reconciliation payment amount for a performance year cannot exceed 5 percent of the aggregated reconciliation target price amount calculated in accordance with paragraph (c)(3) of this section for the performance year.
(iii) For TEAM participants in Track 3, the reconciliation payment amount for a performance year cannot exceed 20 percent of the aggregated reconciliation target price amount calculated in accordance with paragraph (c)(3) of this section for the performance year.
(iv) The post-episode spending amount calculated in accordance with paragraph (f) of this section is not subject to the limitation on gain.
(3) Limitation on loss for certain providers. For performance years 2-5, the repayment amount for a TEAM participant in Track 2 defined at § 512.505, must not exceed 5 percent of the aggregated reconciliation target price amount calculated in accordance with paragraph (c)(3) of this section.
(f) Post-episode spending calculation. CMS calculates the post-episode spending amount as follows: If the average post-episode spending amount for a TEAM participant in the performance year being reconciled is greater than 3 standard deviations above the regional average post-episode spending amount for the performance year, then the post-episode spending amount that exceeds 3 standard deviations above the regional average post-episode spending amount for the performance year is subtracted from the NPRA for that performance year.
(g) Calculation of the reconciliation payment or repayment amount. (1) CMS applies the results of the post-episode spending calculation set forth in paragraph (f) of this section to the NPRA as follows:
(i) For TEAM participants whose post-episode spending amount does not exceed the limit calculated in paragraph (f) of this section, the reconciliation payment or repayment amount is equal to the NPRA.
(ii) If the TEAM participant's post-episode spending exceeds the limit calculated in paragraph (f) of this section, CMS subtracts the amount of post-episode spending exceeding the limit from the NPRA to calculate the reconciliation payment or repayment amount.
(2) If the amount calculated in paragraph (g)(1) of this section is positive, the TEAM participant is owed a reconciliation payment in that amount, to be paid by CMS in one lump sum payment.
(3) If the amount calculated in paragraph (g)(1) of this section is negative, CMS determines the repayment amount as follows:
(i) For TEAM participants in Track 1, the TEAM participant does not owe a repayment amount.
(ii) For TEAM participants in Track 2 or Track 3 for Performance Years 1-5, as applicable, the Team participant owes that amount as a repayment to CMS.
(h) TEAM reconciliation report. CMS issues each TEAM participant a TEAM reconciliation report for the performance year. Each TEAM reconciliation report contains the following:
(1) The total performance year spending for the TEAM participant.
(2) The TEAM participant's reconciliation target prices.
(3) The TEAM participant's reconciliation amount.
(4) The TEAM participant's composite quality score calculated in accordance with § 512.547(b).
(5) The TEAM participant's quality-adjusted reconciliation amount.
(6) The stop-loss and stop-gain limits that apply to the TEAM participant.
(7) The TEAM participant's NPRA.
(8) The TEAM participant's post-episode spending amount, if applicable.
(9) The amount of any reconciliation payment owed to the TEAM participant or repayment owed by the TEAM participant to CMS for the performance year, if applicable.
§ 512.552   Treatment of incentive programs or add-on payments under existing Medicare payment systems.
The TEAM does not replace any existing Medicare incentive programs or add-on payments. The TEAM payments are independent of, and do not affect, any incentive programs or add-on payments under existing Medicare payment systems.
§ 512.555   Proration of payments for services that extend beyond an episode.
(a) General. CMS prorates services included in the episode that extend beyond the episode so that only those portions of the services that were furnished during the episode are included in the calculation of the actual episode payments.
(b) Proration of services. CMS prorates payments for services that extend beyond the episode for the purposes of calculating both baseline episode spending and performance year spending using the following methodology:
(1) Non-IPPS inpatient services. Non-IPPS inpatient services that extend beyond the end of the episode are prorated according to the percentage of the actual length of stay (in days) that falls within the episode.
(2) Home health agency services. Home health agency services paid under the Medicare prospective payment system in accordance with part 484, subpart E of this chapter that extend beyond the episode are prorated according to the percentage of days, starting with the first billable service date and through and including the last billable service date, that occur during the episode.
(3) IPPS services. IPPS services that extend beyond the end of the episode are prorated according to the MS-DRG geometric mean length of stay, using the following methodology:
(i) The first day of the IPPS stay is counted as 2 days.
(ii) If the actual length of stay that occurred during the episode is equal to or greater than the MS-DRG geometric mean, the full MS-DRG payment is allocated to the episode.
(iii) If the actual length of stay that occurred during the episode is less than the MS-DRG geometric mean length of stay, the MS-DRG payment amount is allocated to the episode based on the number of inpatient days that fall within the episode.
(4) If the full amount of the payment is not allocated to the episode, any remainder amount is allocated to the post-episode spending calculation (defined in § 512.550(f)).
§ 512.560   Appeals process.
(a) Notice of calculation error (first level of appeal). Subject to the limitations on review in § 512.594, if a TEAM participant wishes to dispute calculations involving a matter related to payment, reconciliation amounts, repayment amounts, the use of quality measure results in determining the composite quality score, or the application of the composite quality score during reconciliation, the TEAM participant is required to provide written notice of the calculation error, in a form and manner and by a date specified by CMS.
(1) Unless the TEAM participant provides such written notice, CMS deems the TEAM reconciliation report to be final 30 calendar days after it is issued and proceeds with the payment or repayment processes as applicable.
(2) If CMS receives a notice of a calculation error within 30 calendar days of the issuance of the TEAM reconciliation report, CMS responds in writing within 30 calendar days to either confirm that there was an error in the calculation or verify that the calculation is correct. CMS reserves the right to extend the time for its response upon written notice to the TEAM participant.
(3) Only TEAM participants may use the calculation error process described in this part.
(b) Exception to the appeals process. If the TEAM participant contests a matter that does not involve an issue contained in, or a calculation that contributes to, a TEAM reconciliation report, a notice of calculation error is not required. In these instances, if CMS does not receive a request for reconsideration from the TEAM participant within 10 calendar days of the notice of the initial reconciliation, the initial determination is deemed final and CMS proceeds with the action indicated in the initial determination. This does not apply to the limitations on review in § 512.594.
§ 512.561   Reconsideration review processes.
(a) Applicability of this section. This section is applicable only where section 1869 of the Act has been waived or is not applicable for TEAM participants. This section is only applicable to TEAM participants.
(b) Right to reconsideration. The TEAM participant may request reconsideration of a determination made by CMS only if such reconsideration is not precluded by section 1115A(d)(2) of the Act or this subpart.
(1) A request for reconsideration by the TEAM participant must satisfy the following criteria:
(i) The request must be submitted to a designee of CMS (“Reconsideration Official”) who—
(A) Is authorized to receive such requests; and
(B) Did not participate in the determination that is the subject of the reconsideration request or, if applicable, the notice of calculation error process.
(ii) The request must include a copy of the initial determination issued by CMS and contain a detailed, written explanation of the basis for the dispute, including supporting documentation.
(iii) The request must be made within 30 days of the date of the initial determination for which reconsideration is being requested via email to an address as specified by CMS.
(2) Requests that do not meet the requirements of paragraph (b)(1) of this section are denied.
(3) Within 10 business days of receiving a request for reconsideration, the Reconsideration Official sends the parties a written acknowledgement of receipt of the reconsideration request. This acknowledgement sets forth the following:
(i) The review procedures.
(ii) A schedule that permits each party to submit position papers and supporting documentation in support of the party's position for consideration by the reconsideration official.
(4) The TEAM participant must satisfy the notice of calculation error requirements specified in this part before submitting a reconsideration request under paragraph (b) of this section.
(c) Standards for reconsideration. (1) The parties must continue to fulfill all responsibilities and obligations under TEAM during the course of any dispute arising under this part.
(2) The reconsideration consists of a review of documentation that is submitted timely and in accordance with the standards specified by the reconsideration official.
(3) The burden of proof is on the TEAM participant to demonstrate to the reconsideration official with clear and convincing evidence that the determination is inconsistent with the terms of this subpart.
(d) Reconsideration determination. (1) The reconsideration determination is based solely upon—
(i) Position papers and supporting documentation that are timely submitted to the reconsideration official per the schedule defined in paragraph (b)(3)(ii) and meet the standards for submission under paragraph (b)(1) of this section; and
(ii) Documents and data that were timely submitted to CMS in the required format before CMS made the determination that is the subject of the reconsideration request.
(2) The reconsideration official issues the reconsideration determination to CMS and to the TEAM participant in writing.
(3) Absent unusual circumstances, in which case the reconsideration official reserves the right to an extension upon written notice to the TEAM participant, the reconsideration determination is issued within 60 days of receipt of timely filed position papers and supporting documentation per the schedule defined in paragraph (b)(3)(ii) of this section.
(4) The reconsideration determination is final and binding 30 days after its issuance, unless the TEAM participant or CMS timely requests review of the reconsideration determination in accordance with paragraphs (e)(1) and (2) of this section.
(e) CMS Administrator review. The TEAM participant or CMS may request that the CMS Administrator review the reconsideration determination.
(1) The request must be made via email within 30 days of the date of the reconsideration determination to the address specified by CMS.
(2) The request must include a copy of the reconsideration determination and a detailed written explanation of why the TEAM participant or CMS disagrees with the reconsideration determination.
(3) The CMS Administrator promptly sends the parties a written acknowledgement of receipt of the request for review.
(4) The CMS Administrator sends the parties notice of the following:
(i) Whether the request for review is granted or denied.
(ii) If the request for review is granted, the review procedures and a schedule that permits each party to submit a brief in support of the party's position for consideration by the CMS Administrator.
(5) If the request for review is denied, the reconsideration determination is final and binding as of the date the request for review is denied.
(6) If the request for review is granted—
(i) The record for review consists solely of—
(A) Timely submitted briefs and the evidence contained in the record of the proceedings before the reconsideration official; and
(B) Evidence as set forth in the documents and data described in paragraph (d)(1)(ii) of this section;
(ii) The CMS Administrator reviews the record and issues to CMS and to the TEAM participant a written determination; and
(iii) The written determination of the CMS Administrator is final and binding as of the date the written determination is sent.
§ 512.562   Data sharing with TEAM participants.
(a) General. CMS shares certain beneficiary-identifiable data as described in paragraphs (b), (c), and (e) of this section and certain regional aggregate data as described in paragraph (d) of this section with TEAM participants regarding TEAM beneficiaries and performance under the model.
(b) Beneficiary-identifiable claims data. CMS shares beneficiary-identifiable claims data with TEAM participants as follows:
(1) CMS makes available certain beneficiary-identifiable claims data described in paragraph (b)(5) of this section for TEAM participants to request for purposes of conducting health care operations work that falls within the first or second paragraph of the definition of health care operations at 45 CFR 164.501 regarding their TEAM beneficiaries.
(2) A TEAM participant that wishes to receive beneficiary-identifiable claims data for its TEAM beneficiaries must do all of the following:
(i) Submit a formal request for the data on at least an annual basis in a manner and form and by a date specified by CMS, indicating their selection of summary beneficiary-identifiable data, raw beneficiary-identifiable data, or both, and attest that—
(A) The TEAM participant is requesting claims data of TEAM beneficiaries who would be in an episode during the baseline period or performance year, as a HIPAA covered entity.
(B) The TEAM participant's request reflects the minimum data necessary, as set forth in paragraph (c) of this section, for the TEAM participant to conduct health care operations work that falls within the first or second paragraph of the definition of health care operations at 45 CFR 164.501.
(C) The TEAM participant's use of claims data is limited to developing processes and engaging in appropriate activities related to coordinating care, improving the quality and efficiency of care, and conducting population-based activities relating to improving health or reducing health care costs that are applied uniformly to all TEAM beneficiaries, in an episode during the baseline period or performance year, and that these data are not to be used to reduce, limit or restrict care for specific Medicare beneficiaries.
(ii) Sign and submit a TEAM data sharing agreement, as defined in § 512.505, with CMS as set forth in paragraph (e) of this section.
(3) CMS shares this beneficiary-identifiable claims data with a TEAM participant in accordance with applicable privacy and security laws and established privacy and security protections.
(4) CMS omits from the beneficiary-identifiable claims data any information that is subject to the regulations in 42 CFR part 2 governing the confidentiality of substance use disorder patient records.
(5) The beneficiary-identifiable claims data includes, when available, the following:
(i) Unrefined (raw) Medicare Parts A and B beneficiary-identifiable claims data for TEAM beneficiaries in an episode during the 3-year baseline period and performance year.
(ii) Summarized (summary) Medicare Parts A and B beneficiary-identifiable claims data for TEAM beneficiaries in an episode during the 3-year baseline period and performance year.
(6) CMS makes available the beneficiary-identifiable claims data for retrieval by TEAM participants at the following frequency:
(i) Annually, at least 1 month prior to every performance year for baseline period data, based on the baseline periods described in § 512.540(b)(2).
(ii) Monthly during the performance year and for up to 6 months after the performance year for performance year data.
(c) Minimum necessary data. The TEAM participant must limit its request for beneficiary-identifiable data under paragraph (b) of this section to the minimum necessary Parts A and B data elements which may include, but are not limited to the following:
(1) Medicare beneficiary identifier (ID).
(2) Procedure code.
(3) Gender.
(4) Diagnosis code.
(5) Claim ID.
(6) The from and through dates of service.
(7) The provider or supplier ID.
(8) The claim payment type.
(9) Date of birth and death, if applicable.
(10) Tax identification number.
(11) National provider identifier.
(d) Regional aggregate data. (1) CMS shares regional aggregate data for the 3-year baseline period and performance years with TEAM participants as follows:
(i) Shares 3-year baseline period regional aggregate data annually at least 1 month before the performance year, based on the baseline periods described in § 512.540(b)(2).
(ii) Shares performance year regional aggregate data on a monthly basis during the performance year and for up to 6 months after the performance year.
(2) Regional aggregate data—
(i) Is aggregated based on all Parts A and B claims associated with episodes in TEAM for the U.S. Census Division in which the TEAM participant is located;
(ii) Summarizes average episode spending for episodes in TEAM in the U.S. Census Division in which the TEAM participant is located; and
(iii) Is de-identified in accordance with 45 CFR 164.514(b).
(e) TEAM data sharing agreement. (1) A TEAM participant who wishes to retrieve the beneficiary-identifiable data specified in paragraph (b) of this section, must complete and submit, on at least an annual basis, a signed TEAM data sharing agreement, as defined in § 512.505, to be provided in a form and manner and by a date specified by CMS, under which the TEAM participant agrees:
(i) To comply with the requirements for use and disclosure of this beneficiary-identifiable data that are imposed on covered entities by the HIPAA regulations and the requirements of the TEAM set forth in this part.
(ii) To comply with additional privacy, security, breach notification, and data retention requirements specified by CMS.
(iii) To contractually bind each downstream recipient of the beneficiary-identifiable data that is a business associate of the TEAM participant to the same terms and conditions to which the TEAM participant is itself bound in its TEAM data sharing agreement with CMS as a condition of the business associate's receipt of the beneficiary-identifiable data retrieved by the TEAM participant under TEAM.
(iv) That if the TEAM participant misuses or discloses the beneficiary-identifiable data in a manner that violates any applicable statutory or regulatory requirements or that is otherwise non-compliant with the provisions of the TEAM data sharing agreement, CMS may deem the TEAM participant ineligible to retrieve beneficiary-identifiable data under paragraph (b) of this section for any amount of time, and the TEAM participant may be subject to additional sanctions and penalties available under the law.
(2) A TEAM participant must comply with all applicable laws and the terms of the TEAM data sharing agreement in order to retrieve the beneficiary-identifiable data.
§ 512.563   Health equity reporting.
(a) Health equity plans. (1) The TEAM participant may voluntarily submit a health equity plan to CMS for each performance year that includes the elements specified in paragraph (a)(2) of this section, in a form and manner and by the date specified by CMS.
(2) Health equity plans must include the following elements:
(i) Identifies health disparities in the TEAM participant's population of TEAM beneficiaries.
(ii) Identifies health equity goals and describes how the TEAM participant uses the health equity goals to monitor and evaluate progress in reducing the identified health disparities.
(iii) Describes the health equity plan intervention strategy.
(iv) Identifies health equity plan performance measure(s), the data sources used to construct the performance measures, and an approach to monitor and evaluate the measures.
(b) Health-related social needs screening and reporting. (1) For all performance years, the TEAM participant may voluntarily submit aggregated health-related social needs screening and screened-positive data in a form and manner and by the dates specified by CMS. The health-related social needs screening and reporting must include the elements specified in paragraph (a)(2) of this section.
(2) CMS uses the following measures from the Hospital Inpatient Quality Reporting Program for the TEAM participants who opt to voluntarily submit aggregated health-related social needs screening and screened-positive data.
(i) Screening for Social Drivers of Health (SDOH-1; CMIT ID #1664).
(ii) Screen Positive Rate for Social Drivers of Health (SDOH-2; CMIT ID #1662).
(3) For all performance years, TEAM participants that voluntarily submit data health-related social needs screening and screened-positive data as specified in paragraphs (b)(1) and (2) of this section may voluntarily submit information on referral policies and procedures for beneficiaries that screen positive for health-related social needs in a form and manner and by dates specified by CMS.
(c) Demographic data collection and reporting. For all performance years, the TEAM participant may voluntarily collect and submit to CMS, in a form and manner and by the dates specified by CMS, demographic data of TEAM beneficiaries that are willing to share demographic data elements with the TEAM participant and CMS.
§ 512.564   Referral to primary care services.
(a) A TEAM participant must include in hospital discharge planning a referral to a supplier of primary care services for a TEAM beneficiary, on or prior to discharge from an anchor hospitalization or anchor procedure.
(b) In making the referral described in paragraph (a) of this section, the TEAM participant must comply with beneficiary freedom of choice, as described in § 512.582(a).
(c) A TEAM participant that does not comply with paragraph (a) of this section, may be subject to remedial action as described in § 512.592.
§ 512.565   Sharing arrangements.
(a) General. (1) A TEAM participant may enter into a sharing arrangement with a TEAM collaborator to make a gainsharing payment, or to receive an alignment payment, or both. A TEAM participant must not make a gainsharing payment to a TEAM collaborator or receive an alignment payment from a TEAM collaborator except in accordance with a sharing arrangement.
(2) A sharing arrangement must comply with the provisions of this section and all other applicable laws and regulations, including the applicable fraud and abuse laws and all applicable payment and coverage requirements.
(3) TEAM participants must develop, maintain, and use a set of written policies for selecting individuals and entities to be TEAM collaborators.
(i) These policies must contain criteria related to, and inclusive of, the quality of care delivered by the potential TEAM collaborator and the provision of TEAM activities.
(ii) The selection criteria cannot be based directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the TEAM participant, any TEAM collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a TEAM participant, TEAM collaborator, collaboration agent, or downstream collaboration agent.
(iii) A selection criterion that considers whether a potential TEAM collaborator has performed a reasonable minimum number of services that would qualify as TEAM activities, as determined by the TEAM participant, will be deemed not to violate the volume or value standard if the purpose of the criterion is to ensure the quality of care furnished to TEAM beneficiaries.
(4) If a TEAM participant enters into a sharing arrangement, its compliance program must include oversight of sharing arrangements and compliance with the applicable requirements of TEAM.
(b) Requirements. (1) A sharing arrangement must be in writing and signed by the parties, and entered into before care is furnished to TEAM beneficiaries under the sharing arrangement.
(2) Participation in a sharing arrangement must be voluntary and without penalty for nonparticipation.
(3) The sharing arrangement must require the TEAM collaborator and its employees, contractors (including collaboration agents), and subcontractors (including downstream collaboration agents) to comply with all of the following:
(i) The applicable provisions of this part (including requirements regarding beneficiary notifications, access to records, record retention, and participation in any evaluation, monitoring, compliance, and enforcement activities performed by CMS or its designees).
(ii) All applicable Medicare provider enrollment requirements at § 424.500 of this chapter, including having a valid and active TIN or NPI, during the term of the sharing arrangement.
(iii) All other applicable laws and regulations.
(4) The sharing arrangement must require the TEAM collaborator to have or be covered by a compliance program that includes oversight of the sharing arrangement and compliance with the requirements of TEAM that apply to its role as a TEAM collaborator, including any distribution arrangements.
(5) The sharing arrangement must not pose a risk to beneficiary access, beneficiary freedom of choice, or quality of care.
(6) The board or other governing body of the TEAM participant must have responsibility for overseeing the TEAM participant's participation in TEAM, its arrangements with TEAM collaborators, its payment of gainsharing payments, its receipt of alignment payments, and its use of beneficiary incentives in TEAM.
(7) The specifics of the agreement must be documented in writing and must be made available to CMS upon request (as outlined in § 512.590).
(8) The sharing arrangement must specify the following:
(i) The purpose and scope of the sharing arrangement.
(ii) The obligations of the parties, including specified TEAM activities and other services to be performed by the parties under the sharing arrangement.
(iii) The date range for which the sharing arrangement is effective.
(iv) The financial or economic terms for payment, including the following:
(A) Eligibility criteria for a gainsharing payment.
(B) Eligibility criteria for an alignment payment.
(C) Frequency of gainsharing or alignment payments.
(D) Methodology and accounting formula for determining the amount of a gainsharing payment or alignment payment.
(9) The sharing arrangement must not—
(i) Induce the TEAM participant, TEAM collaborator, or any employees, contractors, or subcontractors of the TEAM participant or TEAM collaborator to reduce or limit medically necessary services to any Medicare beneficiary; or
(ii) Restrict the ability of a TEAM collaborator to make decisions in the best interests of its patients, including the selection of devices, supplies, and treatments.
(c) Gainsharing payment, alignment payment, and internal cost savings conditions and restrictions. (1) Gainsharing payments, if any, must—
(i) Be derived solely from reconciliation payment amounts, or internal cost savings, or both;
(ii) Be distributed on an annual basis (not more than once per calendar year);
(iii) Not be a loan, advance payment, or payment for referrals or other business; and
(iv) Be clearly identified as a gainsharing payment at the time it is paid.
(2)(i) To be eligible to receive a gainsharing payment, a TEAM collaborator must meet quality of care criteria for the performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment. The quality-of-care criteria must be established by the TEAM participant and directly relate to the episode.
(ii) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a TEAM collaborator other than ACO, PGP, NPPGP, or TGP must have directly furnished a billable item or service to a TEAM beneficiary during an episode that was attributed to the same performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment.
(iii) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a TEAM collaborator that is a PGP, NPPGP, or TGP must meet the following criteria:
(A) The PGP, NPPGP, or TGP must have billed for an item or service that was rendered by one or more PGP member, NPPGP member, or TGP member respectively to a TEAM beneficiary during an episode that was attributed to the same performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment.
(B) The PGP, NPPGP, or TGP must have contributed to TEAM activities and been clinically involved in the care of TEAM beneficiaries during the same performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment. A non-exhaustive list of examples where, a PGP, NPPGP, or TGP might have been clinically involved in the care of TEAM beneficiaries includes—
( 1 ) Providing care coordination services to TEAM beneficiaries during or after inpatient admission;
( 2 ) Engaging with a TEAM participant in care redesign strategies, and performing a role in implementing such strategies, that are designed to improve the quality of care for episodes and reduce episode spending; or
( 3 ) In coordination with other providers and suppliers (such as PGP members, NPPGP members, or TGP members; the TEAM participant; and post-acute care providers), implementing strategies designed to address and manage the comorbidities of TEAM beneficiaries.
(iv) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a TEAM collaborator that is an ACO must meet the following criteria:
(A) The ACO must have had an ACO provider/supplier that directly furnished, or an ACO participant that billed for, an item or service that was rendered to a TEAM beneficiary during an episode that was attributed to the same performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment; and
(B) The ACO must have contributed to TEAM activities and been clinically involved in the care of TEAM beneficiaries during the performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment. A non-exhaustive list of ways in which an ACO might have been clinically involved in the care of TEAM beneficiaries could include—
( 1 ) Providing care coordination services to TEAM beneficiaries during and/or after inpatient admission;
( 2 ) Engaging with a TEAM participant in care redesign strategies and performing a role in implementing such strategies that are designed to improve the quality of care and reduce spending for episodes; or
( 3 ) In coordination with providers and suppliers (such as ACO participants, ACO providers/suppliers, the TEAM participant, and post-acute care providers), implementing strategies designed to address and manage the comorbidities of TEAM beneficiaries.
(3) The methodology for accruing, calculating and verifying internal cost savings will be determined by the TEAM participant. The methodology—
(i) Must be transparent, measurable, and verifiable in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book).
(ii) Used to calculate internal cost savings must reflect the actual, internal cost savings achieved by the TEAM participant through the documented implementation of TEAM activities identified by the TEAM participant and must exclude—
(A) Any savings realized by any individual or entity that is not the TEAM participant; and
(B) “Paper” savings from accounting conventions or past investment in fixed costs.
(4) The amount of any gainsharing payments must be determined in accordance with a methodology that is based solely on quality of care and the provision of TEAM activities. The methodology may take into account the amount of TEAM activities provided by a TEAM collaborator relative to other TEAM collaborators.
(5) For a performance year, the aggregate amount of all gainsharing payments that are derived from reconciliation payment amounts must not exceed the amount of that year's reconciliation payment amount.
(6) No entity or individual, whether a party to a sharing arrangement or not, may condition the opportunity to make or receive gainsharing payments or to make or receive alignment payments directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the TEAM participant, any TEAM collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a TEAM participant, TEAM collaborator, collaboration agent, or downstream collaboration agent.
(7) A TEAM participant must not make a gainsharing payment to a TEAM collaborator if CMS has notified the TEAM participant that such TEAM collaborator is subject to any action by CMS, HHS or any other governmental entity, or its designees, for noncompliance with this part or the fraud and abuse laws, for the provision of substandard care to TEAM beneficiaries or other integrity problems, or for any other program integrity problems or noncompliance with any other laws or regulations.
(8) The sharing arrangement must require the TEAM participant to recoup any gainsharing payment that contained funds derived from a CMS overpayment on a reconciliation payment amount or was based on the submission of false or fraudulent data.
(9) Alignment payments from a TEAM collaborator to a TEAM participant may be made at any interval that is agreed upon by both parties, and must not be—
(i) Issued, distributed, or paid prior to the calculation by CMS of a repayment amount; payment;
(ii) Loans, advance payments, or payments for referrals or other business; or
(iii) Assessed by a TEAM participant in the absence of a repayment amount.
(10) The TEAM participant must not receive any amounts under a sharing arrangement from a TEAM collaborator that are not alignment payments.
(11) For a performance year, the aggregate amount of all alignment payments received by the TEAM participant must not exceed 50 percent of the TEAM participant's repayment amount.
(12) The aggregate amount of all alignment payments from a TEAM collaborator to the TEAM participant may not be greater than—
(i) With respect to a TEAM collaborator other than an ACO, 25 percent of the TEAM participant's repayment amount.
(ii) With respect to a TEAM collaborator that is an ACO, 50 percent of the TEAM participant's repayment amount.
(13) The amount of any alignment payments must be determined in accordance with a methodology that does not directly account for the volume or value of past or anticipated referrals or business otherwise generated by, between or among the TEAM participant, any TEAM collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a TEAM participant, TEAM collaborator, collaboration agent, or downstream collaboration agent.
(14) All gainsharing payments and any alignment payments must be administered by the TEAM participant in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book).
(15) All gainsharing payments and alignment payments must be made by check, electronic funds transfer, or another traceable cash transaction.
(d) Documentation requirements. (1) TEAM participants must—
(i) Document the sharing arrangement contemporaneously with the establishment of the arrangement;
(ii) Publicly post (and update on at least a quarterly basis) on a web page on the TEAM participant's website—
(A) Accurate lists of all current TEAM collaborators, including the TEAM collaborators' names and addresses as well as accurate historical lists of all TEAM collaborators.
(B) Written policies for selecting individuals and entities to be TEAM collaborators as required by § 512.565(a)(3).
(iii) Maintain, and require each TEAM collaborator to maintain, contemporaneous documentation with respect to the payment or receipt of any gainsharing payment or alignment payment that includes, at a minimum—
(A) Nature of the payment (gainsharing payment or alignment payment);
(B) Identity of the parties making and receiving the payment;
(C) Date of the payment;
(D) Amount of the payment; and
(E) Date and amount of any recoupment of all or a portion of a TEAM collaborator's gainsharing payment.
(F) Explanation for each recoupment, such as whether the TEAM collaborator received a gainsharing payment that contained funds derived from a CMS overpayment of a reconciliation payment or was based on the submission of false or fraudulent data.
(2) The TEAM participant must keep records of all of the following:
(i) Its process for determining and verifying its potential and current TEAM collaborators' eligibility to participate in Medicare.
(ii) Its plan to track internal cost savings.
(iii) Information on the accounting systems used to track internal cost savings.
(iv) A description of current health information technology, including systems to track reconciliation payment amounts, repayment amounts, and internal cost savings.
(v) Its plan to track gainsharing payments and alignment payments.
(3) The TEAM participant must retain and provide access to and must require each TEAM collaborator to retain and provide access to, the required documentation in accordance with § 512.586.
§ 512.568   Distribution arrangements.
(a) General. (1) An ACO, PGP, NPPGP, or TGP that is a TEAM collaborator and has entered into a sharing arrangement with a TEAM participant may distribute all or a portion of any gainsharing payment it receives from the TEAM participant only in accordance with a distribution arrangement.
(2) All distribution arrangements must comply with the provisions of this section and all other applicable laws and regulations, including the fraud and abuse laws.
(b) Requirements. (1) All distribution arrangements must be in writing and signed by the parties, contain the effective date of the agreement, and be entered into before care is furnished to TEAM beneficiaries under the distribution arrangement.
(2) Participation in a distribution arrangement must be voluntary and without penalty for nonparticipation.
(3) The distribution arrangement must require the collaboration agent to comply with all applicable laws and regulations.
(4) The opportunity to make or receive a distribution payment must not be conditioned directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the TEAM participant, any TEAM collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a TEAM participant, TEAM collaborator, collaboration agent, or downstream collaboration agent.
(5) The amount of any distribution payments from an ACO, from an NPPGP to an NPPGP member, or from a TGP to a TGP member, must be determined in accordance with a methodology that is solely based on quality of care and the provision of TEAM activities and that may take into account the amount of such TEAM activities provided by a collaboration agent relative to other collaboration agents.
(6) The amount of any distribution payments from a PGP must be determined in accordance with a methodology that is solely based on quality of care and the provision of TEAM activities and that may take into account the amount of such TEAM activities provided by a collaboration agent relative to other collaboration agents.
(7) A collaboration agent is eligible to receive a distribution payment only if the collaboration agent furnished or billed for an item or service rendered to a TEAM beneficiary during an episode that was attributed to the same performance year for which the TEAM participant accrued the internal cost savings or earned the reconciliation payment amount that comprises the gainsharing payment being distributed.
(8) With respect to the distribution of any gainsharing payment received by an ACO, PGP, NPPGP, or TGP, the total amount of all distribution payments for a performance year must not exceed the amount of the gainsharing payment received by the TEAM collaborator from the TEAM participant for the same performance year.
(9) All distribution payments must be made by check, electronic funds transfer, or another traceable cash transaction.
(10) The collaboration agent must retain the ability to make decisions in the best interests of the patient, including the selection of devices, supplies, and treatments.
(11) The distribution arrangement must not—
(i) Induce the collaboration agent to reduce or limit medically necessary items and services to any Medicare beneficiary; or
(ii) Reward the provision of items and services that are medically unnecessary.
(12) The TEAM collaborator must maintain contemporaneous documentation regarding distribution arrangements in accordance with § 512.586, including all of the following:
(i) The relevant written agreements.
(ii) The date and amount of any distribution payment(s).
(iii) The identity of each collaboration agent that received a distribution payment.
(iv) A description of the methodology and accounting formula for determining the amount of any distribution payment.
(13) The TEAM collaborator may not enter into a distribution arrangement with any individual or entity that has a sharing arrangement with the same TEAM participant.
(14) The TEAM collaborator must retain and provide access to and must require collaboration agents to retain and provide access to, the required documentation in accordance with § 512.586.