CMS Proposes Mandatory Hospital Bundled Model for Joint Replacements

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The Centers for Medicare & Medicaid Services (CMS) is proposing a mandatory, nationwide episode-based payment model for joint replacements that would hold most hospitals responsible for Medicare spending tied to a patient's surgery and recovery. The model, referred to as CJR-X, would require hospitals to manage costs for knee, hip and ankle replacements, including the surgery and the first 90 days of recovery, starting October 1, 2027.

Why it matters

The proposed CJR-X model is an effort by CMS to control Medicare costs and improve quality of care for joint replacement procedures. By holding hospitals accountable for the full episode of care, the model aims to incentivize providers to deliver more efficient and effective treatment. However, the previous CJR model had uneven financial impacts, particularly on safety-net hospitals, which raises concerns about the new proposal's effects on vulnerable patient populations.

The details

Under the CJR-X model, hospitals would be measured against a target price for the full episode of care and could receive additional payments or owe money back to Medicare based on their spending and quality performance. CMS tested a similar payment model from April 2016 through December 2024, which the agency said generated Medicare savings while maintaining quality, though with limited impact on quality outcomes and uneven financial effects across hospitals.

• The proposed CJR-X model would be implemented through the fiscal year 2027 Hospital Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System rule.
• The original CJR model was launched in April 2016 and required hospitals in 67 metro areas to manage the full 90-day episode of care, linking inpatient and post-acute spending.

What’s next

CMS will accept public comments on the proposed CJR-X model before finalizing the rule.