In the Inpatient Prospective Payment System (IPPS) proposed rule for fiscal year 2027, CMS and the Center for Medicare and Medicaid Innovation (CMMI) introduced a new mandatory bundled payment model: the Comprehensive Care for Joint Replacement Expanded (CJR-X) Model. If finalized, the model will begin on October 1, 2027, and CMS projects that more than 2,500 hospitals will be required to participate.
This article explores key details of CJR-X, including:
- Hospital selection criteria
- Episodes of care included in the model
- Beneficiary population
- Quality measures
- Pricing and payment methodology
- Provider alignment opportunities and waivers
Which Hospitals Are Required to Participate in CJR-X?
CMS proposes that most acute care hospitals paid under both IPPS and the Outpatient Prospective Payment System (OPPS) would be required to participate in the model. Hospitals located in Maryland would be excluded. Hospitals participating in the Transforming Episode Accountability Model (TEAM) also would be excluded until December 31, 2030, when that program is scheduled to end.
What Procedures & Episodes Are Included in CJR-X?
Similar to recent lower extremity joint replacement (LEJR) episode of care definitions in CMMI programs, CJR-X episodes would be triggered by both inpatient and outpatient LEJR procedures. Triggering services would include hip, knee, and ankle replacements/reattachments under inpatient Medicare Severity Diagnosis-Related Groups (MS‑DRGs) 469, 470, 521, and 522, and outpatient procedures identified by Healthcare Common Procedure Coding System (HCPCS) codes 27130 (total hip arthroplasty) and 27447 (total knee arthroplasty). Like prior CMMI bundled payment models, low-acuity LEJR procedure episodes would be priced on a site-neutral basis.
Each episode would include the index admission or procedure plus 90 days of post‑discharge care, encompassing Part A and B spending for hospital, physician, and post‑acute services. Like prior episodic payment models, certain Part A and B items and services that are clinically unrelated to an LEJR procedure would be excluded, though our research suggests that 99% of claims are included in these episodes.
What Are the Beneficiary Criteria for CJR-X?
Under CMS’ proposal, beneficiaries whose care would be included in CJR-X include those who meet the following criteria at the time of their admission for an anchor procedure or anchor hospitalization:
- Are enrolled in Medicare Part A and Part B
- Have Medicare as their primary payor
- Are not eligible for Medicare based on end-stage renal disease (ESRD)
- Are not enrolled in a Medicare managed care plan
- Are not covered under a United Mine Workers of America health plan
- Are in a CJR-X episode as described above
How Will Quality Be Measured & Scored in CJR-X?
CMS proposes including five quality measures in CJR-X. Like prior episodic payment models, these measures will be combined into a composite quality score (CQS) that will affect reconciliation payment eligibility and amount. The proposed quality measures include:
- Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) &/or Total Knee Arthroplasty (TKA)
- Hospital Visits Within 7 Days of Hospital Outpatient Department (HOPD) Surgery
- Hospital Consumer Assessment of Healthcare Providers & Systems (HCAHPS) Survey
- Outpatient & Ambulatory Surgery Consumer Assessment of Healthcare Providers & Systems Survey (OAS CAHPS)
- Hospital-Level THA &/or TKA Patient-Reported Outcome-Based Performance Measure (PRO-PM)
CMS proposes that CJR‑X quality measures be scored relative to national performance benchmarks, consistent with prior CJR and CMMI bundled payment models.
Hospitals with favorable episode spending relative to their target price would be required to meet a minimum CQS threshold to receive a reconciliation payment. A higher CQS would result in larger positive reconciliation payments. Poor quality performance would reduce shared savings or eliminate eligibility for a positive reconciliation payment altogether. Though the quality calculations are materially different from TEAM, neither model proposes rewarding hospitals for quality improvement instead of performance.
What is the Pricing & Payment Methodology for CJR-X?
CMS proposes a regional, episode‑type-specific pricing methodology for CJR‑X using three years of baseline standardized spending, trended forward to the performance year. Target prices would be set at the MS‑DRG/HCPCS/region level, with inpatient and outpatient LEJR procedures combined into a “site-neutral price” where clinically comparable. Spending would be capped at the 99th percentile, then adjusted by a prospective trend factor, a discount factor of up to 2% based on the CQS, risk-adjustment multipliers, and a prospective normalization factor (limited to ±5% at reconciliation).
The proposed risk adjustment methodology is the same as used in TEAM and would reflect hospital characteristics and detailed beneficiary factors, with final reconciliation accounting for realized case mix and spending trends. A retrospective trend factor (capped at ±3%) is incorporated into the reconciliation target price to estimate realized changes in spending patterns during the performance year.
Are There Special Considerations for Low Volume Hospitals in CJR-X?
CMS proposes to exclude “low-volume” hospitals from reconciliation for the performance year in which the hospital does not exceed the exclusion threshold. The proposed rule defines “low-volume hospital” as one with fewer than 31 LEJR episodes performed during the applicable baseline period.
What is the Reconciliation Process for CJR-X?
CMS proposes an annual, retrospective reconciliation process, conducted six months after the close of each performance year. CMS would compare each hospital’s actual aggregate episode spending for LEJR episodes to a reconciliation target price, which reflects updated risk adjustment, trend factors, and normalization adjustments.
CMS proposes to calculate net payment reconciliation amounts (NPRAs) as the difference between target prices and standardized episode spending, subject to 99th‑percentile outlier caps, wage index adjustments, and proration for services spanning episode end dates. Hospitals earning savings must meet minimum quality requirements, with reconciliation payments adjusted based on the CQS. Hospitals with “Excellent” or “Good” quality may receive full or partial payments, while those rated “Below Acceptable” are ineligible for positive NPRA. This approach is similar to the original CJR Model but markedly different from TEAM.
In addition, CMS proposes stop‑gain and stop‑loss limits. If finalized, CMS would cap gains and losses resulting from CJR-X at ±20% for most hospitals. Gains and losses would be capped at ±5% for certain rural hospitals, Medicare-dependent small rural hospitals (MDHs), sole community hospitals (SCHs), and hospitals that meet the definition of safety-net as proposed in the CJR-X Model. Unlike TEAM, CMS does not propose to phase in downside risk; all CJR-X hospitals would be subject to two-sided financial risk for all performance years in the model.
Finally, CMS proposes retaining the post‑episode spending policy from the original CJR Model in CJR‑X to deter hospitals from delaying or withholding medically necessary care until after the 90-day episode ends. CMS would compare hospitals’ average 30-day post-episode Medicare Part A and B spending to a regional benchmark and require repayment for amounts exceeding three standard deviations above the regional average, without stop-loss protection.
What Financial Arrangements Are Allowed Under CJR-X?
Similar to other CMMI models, CMS proposes allowing CJR‑X hospitals to enter into financial arrangements with collaborating providers and suppliers, such as physicians, skilled nursing facilities (SNFs), home health agencies, and other post‑acute care providers, to support care coordination across the LEJR episode. Hospitals may share reconciliation payments or repayment responsibility through gainsharing or alignment payments, subject to caps, quality requirements, and prohibitions on payments tied to referral volume or value. All arrangements must be documented, performance‑based, and compliant with applicable fraud‑and‑abuse waivers and safeguards.
What Beneficiary Incentives Are Allowed Under CJR-X?
CMS proposes allowing CJR‑X participants to offer in-kind beneficiary engagement incentives, including limited-value technology, to improve care quality and beneficiary self-management during the 90-day episode. Incentives must be clinically related, advance defined clinical goals, meet value and retrieval limits, and be documented. CMS proposes safeguards and reliance on the Anti-Kickback Statute (AKS) safe harbor and seeks comment on these requirements.
What Rules & Restrictions Are Waived for CJR-X Hospitals?
CMS proposes several waivers for CJR‑X participants to support care coordination, discharge flexibility, and post‑acute efficiency. These include:
- Post-Discharge Home Visits: A waiver of the “incident‑to” billing rule to allow up to nine post‑discharge home visits by licensed clinical staff for beneficiaries who do not qualify for home health, including payment during surgical global periods. The G-code would be paid at approximately $50 under the Physician Fee Schedule.
- Telehealth Waivers: A waiver that would remove geographic and originating‑site restrictions, allowing eligible episode‑related services to be furnished in beneficiaries’ homes, with new CJR‑X‑specific telehealth G‑codes.
- SNF Three-Day Rule: A waiver of the three-day SNF inpatient stay requirement, permitting discharge to qualified SNFs (generally three-star or higher) or swing bed facilities, with added beneficiary financial liability protections and monitoring safeguards.
How Forvis Mazars Can Help You Prepare for the CJR-X Model
Our value-based care team has extensive experience supporting hospitals in alternative payment models, including TEAM, ASM, CJR, BPCI-A, and more. We have the tools and capabilities to help you understand your organization’s current state performance, identify and execute on improvement opportunities, and prepare for two-sided risk. We will continue to monitor CMS’ announcements regarding CJR-X and share updates as they become available. If you have any questions about how the model may affect your organization, please reach out to our team today.