TrustWorks On Call: Will TEAM Work

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. CMS finalizes inpatient rule, updating mandatory bundled payment model.

Last Thursday, the Centers for Medicare & Medicaid Services (CMS) issued the 2026 Hospital Inpatient Prospective Payment System (IPPS) final rule, headlined by a 2.6 percent payment increase, up from 2.4 percent in the proposed rule but down from 2.9 percent in last year’s final rule.
The rule also adjusts the Transforming Episode Accountability Model (TEAM), a bundled payment program running from 2026 to 2030 that's mandatory for over 700 hospitals, by allowing a deferment period for some hospitals, adding a neutral score for hospitals not generating enough quality data, incorporating more patient data into quality outcomes, and eliminating downside risk for the lowest-volume hospitals.
TEAM will pay participating hospitals with risk-based arrangements to manage 30-day episodes, including post-acute care, of traditional Medicare beneficiaries undergoing five types of surgical procedures: lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedures.

TrustWorks Take: TEAM can be seen as a successor to Medicare's first mandatory bundled payment program, the Comprehensive Care for Joint Replacement (CJR) Model, which ran from 2016 through 2024. The model generated large cost-savings for CMS and quality improvements for patients, but featured imperfect incentive alignment that resulted in some hospitals being penalized despite achieving the program goals. TEAM improves on some of CJR’s problems by shortening the episode from 90 to 30 days and incorporating more patient equity factors. However, it remains to be seen if the incentive structures will appropriately reward all stakeholders, especially the physicians central to these care coordination efforts, for successful outcomes. Mandatory models can suffer from improper alignment, which is why the American Hospital Association has lobbied in vain to make TEAM voluntary. Unfortunately, for an industry as risk averse as hospitals, voluntary models with meaningful stakes tend to wither on the vine. Only through mandatory models are we likely to achieve the sufficiently broad engagement needed to drive meaningful movement toward value.

2. DOJ investigating NewYork-Presbyterian for potential antitrust violations.

NewYork-Presbyterian (NYP), a ten-hospital system based in New York City, is under civil investigation by the Department of Justice (DOJ) for a “potential unlawful agreement between [NYP] and health insurance companies relating to steering restrictions and contracting conduct,” according to a subpoena obtained by the New York Times.
A large New York labor union, Local 32BJ of the Service Employees International Union, requested last year that the DOJ investigate the health system for anticompetitive behavior, alleging that NYP colluded with insurers, acting as third-party administrators (TPA), to prevent the union from steering its members to lower-cost hospitals in the city.
Local 32BJ ultimately excluded NYP from its network in 2023, although it struggled to find a TPA that could construct an alternative network before ultimately reaching a deal with Anthem.

TrustWorks Take: The opaque nature of contracts struck between prominent or market-dominant health systems and insurers, especially when acting as TPAs of self-insured employers, creates an opportunity and permission structure for collusion. The DOJ has not charged NYP with any wrongdoing, but it’s not a shock to read allegations that a health system and some local insurers may be engaged in these types of anticompetitive practices. While this union has routed its complaints through the DOJ, other self-insured employers have sued their TPAs directly, using price transparency data to argue that these TPAs aren’t upholding their fiduciary duty to obtain the best prices. Both strategies could lead to fairer contracting practices on a case-by-case basis, while also adding fuel to the fire of lawmakers’ efforts to use price transparency as a tool to lower healthcare costs nationwide.

3. CMS planning an experiment to cover weight-loss drugs.

As reported by the Washington Post last week, CMS is finalizing a proposal to allow state Medicaid programs and Medicare Part D plans to voluntarily cover drugs for “weight management” purposes, including high-cost GLP-1s Wegovy and Zepbound.
The pilot program would begin in April 2026 for Medicaid programs and January 2027 for Medicare Part D plans.
Last April, the Trump administration rescinded a Biden-era proposed rule that would have broadly expanded anti-obesity medication coverage under Medicare and Medicaid.

TrustWorks Take: Healthcare leaders in the Trump administration appear to have differing opinions on GLP-1s, with CMS Administrator Dr. Mehmet Oz publicly supporting them, while Health Secretary Robert F. Kennedy Jr. favors lifestyle changes over pharmaceutical interventions. That this pilot program leaked before official publication could suggest this division still exists, but this policy to open the door to weight-loss drug coverage would be a significant victory not just for Dr. Oz’s camp, but for the millions of patients who could gain affordable access to GLP-1s. It’s unclear how affordable these drugs will be, however. Semaglutide has been selected for the next round of Medicare drug price negotiations, which could lower prices for all payers, but as state Medicaid offices are brace for massive cuts, they may see GLP-1 coverage as an impossible expense.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Medicare Advantage’s Lack of Competition is Starting to Matter
Local markets for Medicare Advantage (MA) plans are almost always dominated by a couple of insurers, according to analysis by KFF. In 44 percent of counties, one insurer covered a majority of MA enrollees, and in 90 percent of counties, two insurers combined to cover a majority. More often than not, at least one of these two insurers is UnitedHealthcare, which leads enrollment in 41 percent of counties, or Humana, which leads in 25 percent. An uncompetitive insurance market can undermine many of the supposed benefits of privatized Medicare, as payers have less incentive to compete on costs and benefits for a pool of consumers who lack quality alternative choices of plans. Despite these theoretical problems with highly uncompetitive markets, MA plans have delivered continuously lower premiums and better supplemental benefits to enrollees, at the expense of narrower networks for enrollees and greater per-enrollee spending than traditional Medicare. One explanation for this trend is that the primary competitor for a UnitedHealth MA plan is not a Humana MA plan but rather traditional Medicare coverage.

We discussed last week how MA carriers have marketed cost-sharing protections and supplemental benefits to fuel MA’s explosive enrollment growth. However, a new strategy appears to be taking hold. As reported in the Wall Street Journal, insurers like CVS and Humana are starting to scale back MA benefits, and “Wall Street is cheering them on.” Their stocks rose, and their earnings beat expectations even as Humana projected a 500K loss in MA membership. In contrast, UnitedHealthcare expanded its MA rolls this year resulting in a “disappointing” financial performance, so it plans to raise prices and rollback benefits next year.

Dialing In

Sharing insights from our work with clients

A New Framework for Succession Planning
Anytime I work with a physician group, I make it a point to connect not only with the partners and veteran leaders who are often my primary contacts, but also with the next-generation physicians coming up behind them. Having worked up the chain of command in my own career, I understand how important it is to feel connected to, and supportive of, future leaders. The best organizations offer that connection to everyone, not just those on a partner track or seeking leadership titles, but also those who want to contribute meaningfully while aligning work with their broader life priorities.

That’s why I’m concerned with some patterns I’ve noticed in succession planning these days. Namely, rather than treating it as a proactive, strategic priority, it’s frequently reduced to a generational challenge with reactive, episodic replacements.

For example, senior physicians, having built the foundation on which the current organization stands, often wish to sustain their productivity (or begin to wind down), while continuing to receive compensation that reflects both current contribution and the historical value they’ve created. Meanwhile, newer physicians may prioritize greater lifestyle balance, willingly trading off some productivity, yet still seeking compensation levels comparable to the senior partners whose success and income they’ve witnessed up close. Succession planning flattens this relationship into one of eventual replacement, rather than an evolving coexistence.

Within these dynamics lies not just the challenge of leadership transition, but the imperative to recruit and develop successors, maintain clinical continuity, and sustain the economics of the enterprise through change. When perceptions around fairness, entitlement, and contribution diverge (particularly across generations), it complicates succession planning in both subtle and structural ways.

These are not necessarily opposing camps, but they do reflect meaningful differences in how physicians view engagement, value, and reward. Navigating them requires moving beyond the current succession framework as an individual personnel issue and instead treating it as a core dimension of workforce management and economic strategy.

Succession isn’t just about what or who comes next. It’s about how teams work together today to build a future that doesn’t rest on any single set of shoulders. It’s about how experience is transferred, how trust is built, and how the organization evolves in anticipation of change, not simply in response to it.

When we reframe succession as workforce management, the conversation deepens. It shifts from replacing roles to examining models and staffing, while preparing people for those changes. It moves the focus from individual career arcs to “groupness” and the most efficient system-wide resource application. This broader lens opens the door to reimagining how care is delivered and by whom, and you naturally begin to question the current team composition and underlying cost and revenue models as well.

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