Under the recently finalized joint replacement model from CMS, hospitals are financially accountable for every readmission, complication and therapy bill in a 90-day joint replacement episode, even though the surgeons who drive most of those outcomes aren’t held to the same standards.
Starting Jan. 1, 2028, CJR-X marks the first time CMS has made an episode-based payment program both mandatory and nationwide. The model builds on a predecessor that saved Medicare more than $100 million, and CMS is betting the expanded version will do the same.
Three orthopedic leaders spoke with Becker’s and said that shared accountability, not just shared risk, is key to the model’s success.
Note: Responses were lightly edited for clarity and length.
Question: Hospitals carry the financial risk, but surgeon decisions largely drive readmissions and complications. Does this shift from the new model feel fair to you, or do you think it will create friction between surgeons and hospital administration?
Eric Cohen, MD. Orthopedic Surgeon of University Orthopedics (East Providence, R.I.): No, not in a vacuum. Holding an institution financially responsible for individual clinical decisions, or conversely, expecting surgeons to alter their practice patterns without financial alignment, is inherently asymmetrical.
Administrators absorb the downside risk (penalties, bundled payment overruns, uncompensated readmissions) while lacking a medical license to directly dictate how a surgeon operates, selects patients, chooses implants and plans discharge.
On the flip side, surgeons often believe that readmissions and complications stem from systemic post-acute gaps (e.g., poor home health follow-up, patient noncompliance, social determinants of health) rather than surgical technique. Yet, administrative pressure forces them to manage nonclinical logistics.
Hospitals and surgeons will always have a certain degree of friction, and that’s okay. But the friction the CJR-X model will generate is not a healthy degree of tension. I believe the hospitals that will win under this mandate aren’t going to just sit back and take on all the risk alone. They’re going to use the model’s gainsharing rules to get surgeons on board.
Emeka Nwodim, MD. Orthopedic Spine Surgeon and Managing Partner of Centers for Advanced Orthopaedics, Bay Area Orthopaedics & Sports Medicine Division (Hanover, Md.): This is an important topic that is often oversimplified. The notion that only hospitals or health systems bear financial risk is both misleading and inaccurate. Everyone involved in delivering care — including physicians, surgeons, nurses, physician assistants (or associates), technicians, medical assistants and administrative staff — assumes financial risk relative to their compensation, career and quality of life.
For physicians and surgeons, our decisions carry both clinical and financial consequences. Every decision affects patient outcomes, resource utilization and healthcare costs. Guided by our oath, training and professional responsibility, we make these decisions with an unwavering commitment to our patients. As a result, physicians should play a central role in care delivery decisions while working collaboratively with executives and administrators.
The same principle applies to CJR-X. If the model is implemented with honesty, integrity, transparency and genuine collaboration among clinicians, executives and administrators, it has the potential to achieve what every value-based model strives for: better patient outcomes, higher-quality care and sustainable financial performance.
Heath Pratt. Director of Orthopedics and Sports Medicine of Hendrick Health (Abilene, Texas): Surgeon decisions absolutely matter, but they are not the only thing driving readmissions and complications after a joint replacement. Patient selection, medical optimization, the surgery itself and the discharge plan all play a role. But so do nursing care, medication management, access to therapy, family support and how quickly someone can get help when a problem comes up after discharge.
This is extremely important in a regional market like Abilene. We serve patients from all across West Central Texas, and some of them travel a long way for surgery. Once they go home, they may not have the same access to physical therapy, home health, specialists or even reliable transportation. Those things can have a major impact on the full 90-day episode, even when the surgery and hospital care went well.
I understand why CMS puts the hospital at financial risk, because the hospital is usually in the best position to help coordinate the full episode of care. But it becomes difficult when the hospital carries most of the downside while the physicians, therapy providers and post-acute providers are not always working under the same incentives.
The answer has to be shared accountability. Hospitals and surgeons need to look at the same data, agree on the care pathway and work together on complications, readmissions, rehab utilization and total cost. If hospitals are going to be held responsible for the full episode, the model also needs to account for the real barriers facing the patients and communities they serve. Otherwise, hospitals may be penalized for factors that cannot be fixed by the surgeon or the hospital alone.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
