CMS Proposes CJR-X: Nationwide Expansion of Joint Replacement Care Model

The Centers for Medicare & Medicaid Services (CMS) has announced a proposal to implement a nationwide expansion of its Comprehensive Care for Joint Replacement (CJR) model. This initiative, referred to as CJR-X, aims to enhance the coordination of care for Medicare beneficiaries undergoing hip, knee, and ankle replacements by integrating hospital services with home health and skilled nursing facility (SNF) care.

The proposal builds upon the foundation of the original CJR model, which concluded on December 31, 2024. By shifting toward an episode-based payment structure, CMS intends to incentivize healthcare providers to collaborate more effectively from the moment of surgery through the critical 90-day recovery window.

According to CMS, the expanded model is designed to address the common challenges Medicare patients face, such as uncoordinated care and complications during recovery. By providing bundled payments, the model encourages hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care for lower extremity joint replacements (LEJR) performed in both inpatient and outpatient settings.

The move toward a mandatory nationwide model marks a significant shift in how Medicare handles episode-based payments. If finalized, CJR-X would be the first such model in original Medicare to be mandatory for hospitals across the United States, with a proposed start date of October 1, 2027.

Analyzing the Impact and Savings of the Original CJR Model

The decision to expand the program is driven by data from the original CJR model’s performance. CMS stated in an April 10 announcement that the most recent evaluation of performance years 6 and 7 (covering 2021-2023) showed the CJR Model generated an estimated $112.7 million in net Medicare savings. This was achieved while maintaining the quality of care for more than 98,000 knee and hip replacement patients across 323 hospitals.

The original model focused on the most common surgeries Medicare beneficiaries receive: hip and knee replacements. The goal was to reduce the confusion and lack of coordination patients often experience before and after surgery, which can lead to prolonged recovery times or medical complications and unnecessary costs.

For home health providers, the original model provided significant operational insights. Brian Fuller, managing director in ATI Advisory’s Provider Strategy and Care Transformation Practice, noted that participating home health providers gained substantial learning regarding success within a mandatory bundled payment model, which will serve as a blueprint for future iterations of healthcare delivery.

Key Mechanics of the CJR-X Proposed Model

Under the proposed CJR-X framework, participating hospitals will be held responsible for ensuring patients receive high-quality, affordable, and coordinated care. This responsibility extends from the initial procedure through the first 90 days of recovery. This structure is specifically intended to incentivize hospitals to help patients navigate all aspects of their rehabilitation, including physical therapy and at-home or outpatient services.

The financial mechanism of the model relies on a target price system. Hospitals will be assessed against a target price for all costs associated with the joint replacement procedure and subsequent post-surgery care. At the conclude of a performance year, the actual spending for these care episodes will be compared to the hospital’s target price. Based on this comparison, hospitals may be eligible for additional Medicare payments or may be required to repay a portion of the payments incurred during the episode.

Risk Adjustment and Financial Guardrails

To ensure fairness and stability, CMS is proposing several “guardrails” and a more sophisticated risk adjustment methodology. One primary improvement is the increase in risk adjusters; while the original CJR model utilized only 3 adjusters, the proposed CJR-X model includes 29 adjusters to better account for patient complexity.

CMS is proposing a 5% stop loss for hospitals that serve large dual-eligible populations. To ensure that cost-cutting does not compromise patient health, hospitals must also achieve a minimum level of quality before they can receive any reconciliation payments.

Coordination with Post-Acute Care and Rule Waivers

A central goal of CJR-X is to drive better coordination between hospitals and post-acute providers, such as skilled nursing facilities and home health agencies. To facilitate this, CMS has suggested that certain Medicare rules may be waived under the novel model to incentivize cost-effective care.

One significant proposal is the potential waiver of the 3-day stay requirement. Currently, Medicare coverage for ensuing SNF care typically requires a qualifying three-day hospital inpatient stay. Waiving this requirement could allow patients to transition more quickly to the most appropriate setting for their recovery, potentially reducing costs and improving patient outcomes.

Exemptions and Scope

While the model is intended to be nationwide, not all hospitals will be immediately impacted. CMS has proposed that certain hospitals be initially exempt from CJR-X, including those already participating in the Transforming Episode Accountability Model (TEAM).

The scope of the model covers a variety of lower extremity joint replacements (LEJR). This includes hip and knee replacements performed in either inpatient or outpatient settings, as well as total ankle replacements performed in the inpatient setting and the broader goals of the CJR framework.

Summary of the Proposed CJR-X Framework

The proposed expansion represents a significant step in the evolution of value-based care in the United States. By holding hospitals accountable for the entire 90-day recovery episode, CMS aims to shift the focus from the volume of services provided to the overall quality and efficiency of the patient’s journey from surgery to recovery.

The next official step involves the review of the proposed rules as part of the Fiscal Year 2027 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) Proposed Rule. Stakeholders and healthcare providers are encouraged to monitor official CMS announcements for the final ruling and implementation guidelines.

We invite our readers to share their perspectives on the shift toward mandatory bundled payments in the comments below.