The Comprehensive Care for Joint Replacement Expanded (CJR-X) Model, CMS’ new mandatory bundled payment model for 90-day Medicare lower extremity joint replacement (LEJR) episodes, is expected to start October 1, 2027 and include more than 2,500 hospitals nationwide. Participating hospitals will face two-sided financial risk, with performance tied to quality outcomes and total episode spending across inpatient, outpatient, and post-acute care.
As hospitals prepare for CJR‑X, many executives are focused on redesigning care, improving physician alignment, and mitigating risk. However, based on our experience supporting more than 400 hospitals in Medicare bundled payment programs, governance is a critical, often underappreciated success factor in achieving all three goals.
Establishing a clear, effective governance structure is foundational to operationalizing the model and sustaining performance over time. This article explores key considerations for building a governance framework, including who should be accountable for decision making and how to turn decisions into action.
Who Is Responsible for Performance in CJR-X?
CJR‑X represents a departure from traditional reimbursement structures. A 90-day episode of care requires more coordination across clinical, financial, and operational domains than a fee-for-service payment for an admission. As a result, ownership of or responsibility for the program doesn’t naturally reside within a single department.
CJR-X is not purely a finance initiative or solely a clinical transformation effort. Instead, it impacts care delivery, compliance, physician engagement, post‑acute coordination, and reimbursement policy simultaneously. Lacking a “natural home” within hospital organizational structures, CJR-X can create ambiguity and execution risk for organizations that do not define and implement a formal governance structure.
How Does a Governance Structure Support CJR-X Performance?
An effective governance structure defines who is responsible, how they make decisions, and how the organization maintains accountability for the long term. Without it, hospitals risk a scenario where multiple stakeholders assume someone else “owns” CJR‑X, which can lead to missed opportunities to improve patient outcomes and financial penalties resulting from delayed decisions, scattershot improvement initiatives, and fragmented execution. It’s a vicious cycle.
CJR‑X is mandatory, and participation requirements apply regardless of organizational size or prior experience with alternative payment models. This means that even hospitals with limited infrastructure for value‑based care must rapidly develop the capabilities needed to succeed. A strong governance structure provides the framework to do so, helping to define and distribute responsibilities across leadership, finance, clinical teams, and operational stakeholders.
Which Hospital Functions Should Be Included in the CJR-X Governance Structure?
A governance structure designed to support CJR-X performance should be multidisciplinary. At a minimum, it should include representation from:
- Finance: These representatives understand and manage Medicare reimbursement impact and support financial reporting capabilities.
- Clinical: Clinicians provide a deep understanding of LEJR episode care pathways.
- Compliance/Legal: These representatives support adherence to CJR-X program rules.
Many larger hospitals or health systems may use a dyad model pairing clinical and administrative leaders, supported by service line management.
Leadership selection within the governance model also matters. Success in CJR‑X depends on a specific kind of leadership: individuals who can bridge disciplines. Effective leaders in this model are those who integrate a deep understanding of clinical workflows, financial mechanics, and regulatory requirements. They also need to be able to translate insights seamlessly across diverse audiences, from CFOs to orthopedic surgeons to operational leaders in skilled nursing facilities and other post-acute care settings. These leaders play a critical role in aligning stakeholders and creating change, both of which are essential in a two‑sided risk environment.
How Should CJR-X Governance Teams Handle the Decision-Making Process?
In addition to structure and leadership, process is also important. Organizations should establish a consistent governance cadence, typically with monthly meetings. These forums enable teams to review results, monitor attributed patients, and adjust strategies as the data indicates.
The effectiveness of these meetings depends on their grounding in data. Managing by anecdote is insufficient. Decisions must be informed by empirical, quantitative information, enriched by qualitative insights from front-line teams. Organizations should set a clear strategy and give it time to mature, recognizing that the full picture will emerge gradually from data analysis paired with qualitative feedback from clinicians. Even for hospitals with high-volume joint replacement programs, it can be difficult in the early months to distinguish signal from noise. Experience in previous bundled payment models has shown that prematurely judging performance can undermine long-term success. This could be especially costly in CJR-X, which CMS has proposed as a permanent model.
How Should Hospitals Communicate Governance Decisions With Front-Line Stakeholders?
Another critical aspect of governance is translating decisions into action. Leaders must cascade decisions to front-line implementers, including discharge planners, surgeons, and care coordination teams, who are responsible for executing care redesign initiatives. Incorporating select front-line perspectives into governance discussions can help strengthen this connection and improve the practicality of decisions.
Physician engagement is essential. High‑volume orthopedic surgeons have an outsized influence on episode costs and outcomes and should be integrated into governance discussions where appropriate. Hospitals should also establish structured communication channels with post‑acute providers, even if they are not formal members of the governance body, to align on care pathways and expectations.
Does CMS Require Hospitals to Establish a CJR-X Governance Framework?
A governance framework is not a mandated requirement under the proposed CJR‑X rulemaking. However, that doesn’t mean it’s something hospitals can safely ignore. Governance is vital to helping hospitals coordinate across functions, respond to evolving data, and sustain performance in a complex, longitudinal payment model. With this model, financial accountability begins immediately, increasing the urgency of implementing governance processes to drive care pathway redesign and process improvement before the model begins on October 1, 2027.
Organizations that don’t establish robust governance structures risk repaying CMS for LEJR expenditures that exceed established benchmarks in a model that offers no upside‑only phase. On the other hand, hospitals that invest early in governance may be better positioned to manage the challenges of CJR-X and capture its potential benefits.
How Forvis Mazars Can Help You Prepare for the CJR-X Model
Our value-based care team has extensive experience helping hospitals develop and implement governance structures for alternative payment models including TEAM, ASM, CJR, BPCI-A, MSSP, and more. As CMS continues to expand its mandatory bundled payment strategy through models like CJR-X, we have the knowledge, tools, and capabilities to help participating hospitals succeed. If you have any questions about CJR-X or would like assistance preparing for the model, please reach out to our team today.