Health systems are navigating a continued push toward value-based payment models, with the Centers for Medicare and Medicaid Services (CMS) accelerating timelines and signaling a broader expansion of mandatory bundles faster than many executives anticipated. While not all models are mandatory today, recent developments—and what CMS leaders are previewing—point to a more compulsory future, narrowing the window for preparation.
During a featured session at Becker’s 16th Annual Meeting in April, sponsored by Sound Physicians (Sound), three leaders unpacked the practical realities of competing under new bundled payment models and accountable care structures, and what health systems must do differently to succeed.
Speakers
John Birkmeyer, MDPresident, Medical Group, Sound Physicians
Tom Kim, MD, MMM, FHMChief Medical Officer, Sound Long-Term Care Management, an accountable care organization (ACO)
Susan Huang, MDChief Physician Executive, Providence (Renton, WA), and Chief Executive, Providence Clinical Network
Below are three takeaways from their conversation.
Note: Quotes have been edited lightly for length and clarity.
1. Mandatory bundles are no longer a pilot—and the timeline is tighter than expected
The Transforming Episode Accountability Model (TEAM) went live in January 2026 across 740 hospitals, marking a decisive shift from the voluntary bundled payment experiments health systems have operated under for the past 15 years. Dr. Birkmeyer noted that six days before the session, CMS announced CJR-X, which expands mandatory bundles to the full U.S. hospital population starting with joint replacement in September 2027. Further mandatory bundles covering medical conditions are expected to follow by the end of 2027 and into 2028.
Drawing on Sound’s experience as the largest initiator of bundles under the predecessor BPCI Advanced program—during which the medical group managed more than 300,000 episodes over nearly seven years—Dr. Birkmeyer said success under these models hinges on three things: redesigning workflows and decision-making around post-acute care; embedding advanced care planning into clinical practice, and directly incentivizing physicians on metrics tied to total cost of care, not just length of stay.
“This program won’t be successful if all you do is physician and case management education,” Dr. Birkmeyer said.
2. Value-based care requires long-term commitment, and has to be built into the culture
Providence’s track record illustrates what sustained investment can yield. The system, which spans 51 hospitals across seven states and holds over 1.9 million covered lives in value-based arrangements, generated more than $177 million in Medicare savings in 2025 — translating to a shared savings award exceeding $127 million.
Dr. Huang cautioned that those results didn’t come quickly and can’t be replicated through half-measures. Health systems that treat value-based care as something to be toggled based on market conditions will struggle, she said. Physician buy-in is critical and often underestimated; clinicians need to understand not just the financial mechanics but why value-based care aligns with the reasons they entered medicine.
“Value-based care gives them a way to really speak to their why,” Dr. Huang said. She also emphasized that value-based success is not a primary care story: specialists, hospitals and ambulatory services all have to be brought into the model, with governance structures and data that make variation visible across the full care continuum.
3. High-cost, high-complexity subpopulations need dedicated care models, not workarounds
Perhaps the sharpest insight from the session involved a population most community ACOs have historically underserved: long-term care residents. Dr. Kim estimates that about 10% of Medicare beneficiaries account for roughly 60% of annual Medicare spend, and long-term care residents represent a disproportionate share of that group — with average annual spend of $40K to $50K, compared with between $12K and $13K for community Medicare ACO beneficiaries.
Sound launched a purpose-built Medicare Shared Savings Program ACO for long-term care residents in 2023. In its inaugural year, the program saved Medicare $23 million; in 2024, that figure grew to $114 million. The results come from treating patients in place, integrating fragmented data across care settings, and extending telemedicine support to nursing facilities—including after-hours coverage and what Dr. Kim described as a “tuck-in”” service for late admissions.
The model also extended shared savings incentives to nursing facility staff, not just physicians. “The nursing facility is taking care of these folks 24/7,” Dr. Kim said, noting that limiting incentives to attributed physicians would leave out the caregivers doing the most continuous work.
What this means for hospital executives
The combination of TEAM, CJR-X, and the anticipated wave of medical condition bundles means virtually every major health system will be managing mandatory risk within the next two to three years. The panelists’ collective message: the strategies that work—physician engagement, post-acute care redesign, purpose-built care models for high-risk subpopulations—take time to build and cannot be stood up reactively. Health systems that treat the current moment as the starting gun, rather than the final warning, will be better positioned to protect both their patients and their financial performance.