Physician‑Owned Hospitals Seek Voice in Medicare’s New TEAM Model

Why It Matters

Physician‑owned hospitals have long operated under a regulatory gray zone, with the Affordable Care Act imposing ownership restrictions that limit their participation in certain Medicare programs. By inviting these hospitals to comment on the TEAM model, CMS acknowledges their growing influence and the potential for a more integrated, physician‑driven approach to value‑based care. A policy shift could lower barriers to entry, encourage investment in physician‑led facilities, and reshape the competitive dynamics between traditional health systems and newer, physician‑owned entities. Beyond reimbursement, the engagement could affect quality metrics, data reporting, and risk‑adjustment methodologies that underpin Medicare’s payment reforms. If physician‑owned hospitals secure a seat at the table, they may help craft rules that better align financial incentives with clinical outcomes, potentially improving patient care while containing costs.

Key Takeaways

• CMS opened a public comment period through June 9 for physician‑owned hospitals to weigh in on the TEAM payment model.
• The request for information is filed under “Hospital with Physician Ownership Request for Information” in the Federal Register.
• Carlos Cardenas, M.D., president of Physician‑Led Healthcare for America, called the move “a big step” for physician‑owned hospitals.
• Feedback could lead to adjustments in bundled‑payment calculations and risk‑sharing rules specific to physician‑owned facilities.
• The final rule is expected later in 2026, with the June 9 deadline marking the first formal opportunity for physician‑owned hospitals to influence Medicare policy.

Pulse Analysis

CMS’s outreach to physician‑owned hospitals reflects a broader trend of the federal government seeking granular stakeholder input as it refines value‑based payment models. Historically, the Affordable Care Act imposed strict ownership caps that limited the ability of physician‑owned entities to receive Medicare payments for certain services. By opening the comment window, CMS is testing the waters for a more flexible framework that could reconcile those caps with the realities of modern care delivery, where physicians increasingly own or co‑manage acute‑care facilities.

From a market perspective, the invitation could accelerate consolidation among physician‑owned hospitals, as clearer reimbursement pathways reduce financial uncertainty. Investors have watched the segment’s modest growth with interest, noting that physician leadership often translates into higher operational efficiency and patient satisfaction scores. If the TEAM model is tweaked to accommodate ownership nuances, we may see a wave of new entrants seeking to capitalize on bundled‑payment incentives, potentially reshaping regional hospital markets.

However, the policy shift is not without risk. Traditional health systems may view expanded physician ownership as a competitive threat, prompting lobbying efforts to preserve existing ownership restrictions. Moreover, the success of any rule change will depend on how CMS balances the desire for physician input with safeguards against conflicts of interest that could compromise Medicare’s cost‑containment goals. The upcoming comment period will be a litmus test for both sides, and the final rule will likely set the tone for how Medicare integrates physician‑owned hospitals into its value‑based care agenda for years to come.