On April 10, the Centers for Medicare and Medicaid Services (CMS) released its FY 2027 Hospital Inpatient Prospective Payment Systems (IPPS) Proposed Rule. Included in this rule is the Comprehensive Care for Joint Replacement Expanded Model (CJR-X), a proposed expansion of the mandatory CJR model that was tested starting in 2016 in 34 Metropolitan Statistical Areas (MSAs) and ended on December 31, 2024.
If finalized, CJR-X–covering hip, knee, and ankle replacements in inpatient and outpatient settings would be the first mandatory nationwide episode-based payment model ever rolled out in the US. The model would begin on October 1, 2027, holding hospitals accountable for all spending and care related to a patient’s procedure throughout the 90-day episode.
CJR-X Versus Original CJR
CJR-X emulates original CJR in terms of the core concept: hospitals will continue to be accountable for cost and quality of patient care for hip, knee, and ankle replacement procedures, utilizing bundled payments that would cover all related services under Medicare Part A and Part B within the 90-day episode, including procedure cost, hospital stays, physical therapy, and any follow ups.
As with CJR, hospitals would continue to receive payment under existing the Fee for Service (FFS) model, with reconciliation conducted for each performance year, comparing total spending against a hospital's “target price”. With adjustments based on care quality and actual spending, the hospital would either receive a reconciliation payment or would be required to pay back some portion of its episode spending.
Through this approach, CMS aims to incentivize hospitals to utilize team-focused arrangements across the episode of care, increase care coordination between physicians, settings, and post-acute care, and reduce avoidable and unnecessary episode costs, such as discharge to skilled nursing facilities (SNF), extended length of stay, readmissions, and over-utilizing of physical therapy.
That said, there are differences. The first major difference between the two models is that CJR-X is mandatory for all hospitals, except those participating in the Transforming Episode Accountability Model (TEAM), Maryland hospitals, and those that are not paid under IPPS and OPPS. This represents the vast majority of US hospitals. For TEAM hospitals, once that model ends, they will be required to participate in CJR-X.
One criticism of CJR was the added burden of paperwork on hospitals and the lack of accounting for high-risk and complex populations, which led to many hospitals being financially penalized due to factors they could not fully control. According to CMS, CJR-X will use risk adjustment that is “low on administrative burden but better accounts for ‘acuity’ so that hospitals are not penalized for beneficiaries who are complex or for whom care is unpredictably complicated.”
Finally, while the original CJR was meant to end in 2020 and was then extended, CMS does not appear to have released any information on when CJR-X may end, indicating it may become a permanent model.
CJR-X Quality Measures
CMS notes that CJR-X will rely on a “quality-first principle” where any hospital reconciliation will be dependent on achieving a minimum level of care quality, measured by a composite quality score (CQS) that is based on the following measures:
- Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) measure (Centers for Medicare & Medicaid Services Measures Inventory Tool (CMIT) ID# 350);
- Hospital Visits within 7 days of Hospital Outpatient Department (HOPD) Surgery (CMIT ID #344, OP-36);
- Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure (CMIT ID #338);
- Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems Survey (OAS CAHPS) (CMIT ID #162); and
- Hospital-Level Total Hip and/or Total Knee Arthroplasty (THA/TKA) Patient-Reported Outcome-Based Performance Measure (PRO-PM) (CMIT ID #1618).
This means that, if a hospital does not meet the minimum level of care quality (proposed as a CQS of at least 6.1) and its spending is less than the target price, that hospital would not be eligible for a reconciliation payment at all. This is intended to discourage excessive decreases in care utilization aimed at securing financial benefit.
Of note in these measures is the inclusion of the THA/TKA PRO-PM quality measure, which is already required under the Hospital Inpatient Quality Reporting program (HQR) and is a mandatory measure for TEAM hospitals.
If this model is finalized as proposed, the inclusion of the THA/TKA PRO-PM as a quality measure renders long-term PROMs compliance not just a requirement for minimum reporting thresholds (for example, requiring complete data from at least 50% of patients), but as a direct quality-based input into hospital reimbursement, as is the case in TEAM. Importantly, in the proposed rule, CMS notes that it intends to more heavily weight the THA/TKA PRO-PM into the CQS calculation, meaning it will have a larger impact on success under CJR-X, relative to TEAM or the HQR.
On Equity and Risk
Safety net and rural hospitals (those with a high proportion of dual-eligible Medicare-Medicaid patients, geographically rural hospitals, Medicare-dependent small rural hospitals, and Sole Community Hospitals) will benefit from a 5% stop-loss cap, limiting their financial exposure.
The expanded risk adjustment methodology will also account for dual-eligibility and bed count at the hospital level, alongside the episode-level adjusters for individual patient complexity. It may not be a perfect system, but it's a significantly more sophisticated one than what CJR participants navigated before.
A Tight Window to Prepare
“One of the most consequential drivers of episode performance is something hospitals can't directly control: what patients do when they go home,” Force Therapeutics CEO Bronwyn Spira noted in reaction to the announcement. “When patients aren't adequately prepared for surgery or supported during recovery, complications rise, utilization climbs, and outcomes suffer. Under CJR-X, those gaps carry financial implications.”
Hospitals that succeed will be those that can engage patients consistently before and after surgery, ensuring they understand what to expect, follow prescribed care plans, and stay connected to their care team through the full episode of care. That means standardizing care delivery to reduce variation, shifting appropriate recovery to the home to avoid unnecessary post-acute spend, and investing in infrastructure that gives care teams real visibility into patient progress across the episode.
With deep experience helping hospitals succeed under the original CJR, Force Therapeutics is ready to support our partners through CJR-X with everything from preoperative education and PROMs collection to post-discharge digital rehabilitation and remote monitoring, giving hospitals the tools to engage patients, reduce avoidable readmissions, and meet the quality benchmarks that drive reconciliation payments.
Organizations that take a reactive approach may find themselves perpetually catching up. Many participants in the original CJR had faced challenges, but they all agreed that CJR ultimately improved how they take care of their patients. Hospitals that start planning and investing in better care now can view CJR-X not just as a compliance checkbox, but as a catalyst for delivering better care at scale.
Learn how:
