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.
Beginning Oct. 1, 2027, 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, according to an April 10 news release. CMS did not outline specific cost management strategies.
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 spending and quality performance.
The proposal would be implemented through the fiscal year 2027 Hospital Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System rule.
CMS tested the payment model from April 2016 through December 2024, holding hospitals responsible for spending tied to joint replacement episodes. The agency said the model generated savings while maintaining quality.
The original CJR model, launched in April 2016, required hospitals in 67 metro areas to manage the full 90-day episode of care, linking inpatient and post-acute spending.
Evaluations found the model generated Medicare savings in later years, though with limited impact on quality outcomes and uneven financial effects across hospitals, particularly for safety-net providers.
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