Image by Kevin Schneider from PixabayThe Centers for Medicare & Medicaid Services (CMS) is proposing to expand its Comprehensive Care for Joint Replacement (CJR) model nationwide.
The move aims to revive and broaden a Medicare bundle that could reshape the competitive landscape for orthopedic ambulatory surgery centers (ASCs), even though ASCs are not directly included.
Under the proposal, a new model dubbed “CJR-X” would begin Oct. 1, 2027 and would be mandatory for most acute care hospitals paid under the inpatient prospective payment system, with limited exclusions. Participating hospitals would be held accountable for the cost and quality of lower-extremity joint replacement episodes starting with an inpatient stay or a hospital outpatient procedure and extending 90 days after discharge, according to CMS’ proposed rule.
CJR, first launched in 2016, was designed to push hospitals to better manage the full episode of care around hip and knee replacements, including post-acute spending. (As a quick aside, if you want to learn more about CJR in a post-acute care context, our sister publication, Skilled Nursing News, has you covered.)
CMS said the original model generated an estimated $112.7 million in net Medicare savings while maintaining quality for more than 98,000 patients across 323 hospitals in performance Years 6 and 7.
The proposed CJR-X model would go further. CMS said it would include hospital outpatient procedures in addition to inpatient cases, reflecting the migration of joint replacement into lower-cost settings.
The agency estimates the model would save Medicare $725 million across five performance years.
“Patients undergoing a lower extremity joint replacement with a CJR-X participant may experience a safer procedure, more coordinated recovery, and overall positive experience while maintaining their freedom of choice in providers and services,” CMS wrote.
That does not mean ASCs are in the bundle, however.
CMS’ proposal makes hospitals the participant and accountable entity, not independent surgery centers.
Even so, the model could have consequences for orthopedic ASCs. As hospitals take on more financial accountability for 90-day episode costs, they may become more deliberate about which cases they keep inside hospital-based settings, how they manage discharge planning and post-acute care, and how tightly they align with surgeons and referral networks.
That could create both opportunities and challenges for ASCs.
On one hand, ASCs remain a lower-cost site of care for selected joint cases, a dynamic that has already fueled outpatient migration. On the other, hospitals facing bundled-payment pressure may work harder to retain profitable orthopedic volume and steer patients through more tightly managed care pathways.
The proposal also reinforces a broader trend for ASC operators performing total joints: Medicare continues to move toward episode accountability and outcomes-based oversight in orthopedic care.
The original CJR model concluded Dec. 31, 2024.
In that aforementioned post-acute care context that reflects the ripple effects of CJR, skilled nursing facilities (SNFs) largely saw hospitals begin to steer patients away from SNFs for lower-cost settings, such as home health care, because of the model’s structure.
“CMS is proposing certain guardrails, such as a 5% stop loss for hospitals with large dual-eligible populations and a ‘robust risk adjustment methodology’ that includes 29 adjusters,” Skilled Nursing News explained. “That’s compared to just 3 adjusters in the original CJR model.”
As far as exceptions, the pool is limited.
“Most hospitals paid under the Inpatient Prospective Payment System (IPPS) would be required to participate in CJR-X,” CMS noted. “Certain hospitals would be exempt, including those participating in the Transforming Episode Accountability Model (TEAM), located in Maryland, and those not paid under both the IPPS and Outpatient Prospective Payment System (OPPS).”
