When CMS first made joint replacement bundles mandatory, it tested the model in about 800 acute care hospitals. Starting Jan. 1, 2028, CMS’ Comprehensive Care for Joint Replacement Expanded Model — known as CJR-X — will hold more than 2,200 acute care hospitals financially accountable for joint replacements and the 90 days that follow.
For most hospitals that perform joint replacements, that means answering for costs related to skilled nursing stays, home health visits and return trips to the emergency department.
CJR-X was finalized in the fiscal year 2027 Inpatient Prospective Payment System final rule. It covers Original Medicare patients undergoing hip, knee and ankle replacements in inpatient and outpatient hospital settings, holding hospitals responsible for the full episode of care. After each performance year, CMS compares episode spending with a target price, and a hospital could receive an additional payment or owe money back. Hospitals already in CMS’ Transforming Episode Accountability Model, along with those in Maryland, may be exempt.
At Skokie (Ill.) Hospital, part of Evanston, Ill.-based Endeavor Health, surgeons perform 12,000 to 13,000 orthopedic and spine procedures annually across 20 operating rooms. The hospital — Illinois’ only dedicated orthopedic and spine hospital — is already preparing for CJR-X.
“It is probably going to be one of the bigger shifts in orthopedic care for the last decade,” Gus Granchalek, president of Skokie Hospital, said during a Nov. 3 panel at Becker’s 14th Annual CEO+CFO Roundtable in Chicago.
“We are spending an inordinate amount of time in preparation for this. Because what we’re going to have to do, start to finish, is select the right patient. And that’s a key first step. Not everybody is going to be ready for surgery that wants to have surgery,” he said.
Under CJR-X, decisions made before surgery shape much of a joint replacement’s episode cost. Complications, an unplanned inpatient night, a skilled nursing stay and an emergency visit weeks later all count against the same episode. CMS has said the model is designed to reduce unnecessary services such as avoidable rehospitalizations and emergency visits.
“The vast majority of those patients need to be going home,” Mr. Granchalek said. “So outpatient total joints is sort of the gold standard right now. Even sending a patient upstairs for one night is going to start to erode that cost target that you are after.”
The model also changes who answers for the result. Patients keep their choice of physician, but the hospital is the formal participant and carries the financial risk, even though surgeons drive much of the coordination. The exposure is greater for hospitals that rely on independent surgeons than for those with largely employed medical staff.
“This program is being built differently and so we are effectively on the hook for whatever any surgeon does. … Skokie is 80-plus percent employed orthopedic physicians, orthopedic spine physicians. And so we have a little bit more control on how to shape that care in partnership with them. But we have some that are independent and I think that’s going to be really interesting to create alignment with them,” he said.
The Stark law and the Anti-Kickback Statute have long constrained how hospitals share money with physicians they don’t employ. However, federal rules finalized in 2020 created protections for value-based enterprises, which are networks of clinicians, hospitals and other providers that agree to collaborate toward shared cost and quality goals. CJR-X adds its own mechanism: participating hospitals can enter sharing arrangements with “collaborators,” making gainsharing payments to surgeons and other clinicians when an episode comes in under its target price, and in some cases splitting repayment when it doesn’t.
“We’re in the process of setting up a VBE [value-based enterprise] for these hip and knee patients to create yet better alignment with the physicians to ensure the outcomes we need,” Mr. Granchalek said.
Physician alignment covers only part of the episode. The 90-day spending CJR-X measures also includes post-acute care, such as skilled nursing facility stays and home health services. SNFs, home health agencies and inpatient rehabilitation facilities are all eligible collaborators.
“We have a very robust preferred SNF network. That’s going to be a must-have because then you start putting your own [advanced practice providers] into those SNFs to manage that length of stay, manage the quality, reduce the bounce backs into your emergency department,” he said.
Results from the original CJR model indicate what’s at stake. CMS ran it from April 2016 through December 2024, and its most recent evaluation estimated $112.7 million in net Medicare savings. Earlier evaluations found uneven financial effects across hospitals, particularly safety-net providers. CJR-X now extends that test to nearly three times as many hospitals.
Whether CJR-X produces savings at that scale will depend in part on how hospitals define where a joint replacement begins and ends.
“This is very much about developing 90-day care pathways, not about a surgical episode which lasts four hours or six hours,” Mr. Granchalek said. “The big shift and those that are going to be the most successful are going to be those that start thinking about surgery as a 90-day, 100-day episode of care and put in all the pieces that make that the most effective.”
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