WASHINGTON, D.C. — The Centers for Medicare & Medicaid Services will require most eligible hospitals to participate in a national episode-based payment model for hip, knee and ankle replacements beginning in January 2028, expanding Medicare’s use of financial incentives tied to costs and recovery outcomes.
The Comprehensive Care for Joint Replacement Expanded Model, or CJR-X, was finalized as part of the fiscal 2027 payment rule for inpatient and long-term care hospitals.
Under the model, participating hospitals will be accountable for Medicare spending associated with a joint-replacement procedure, the hospitalization and the first 90 days after discharge. Covered recovery services may include physical therapy and other post-acute care.
The mandatory structure is intended to encourage hospitals, surgeons and post-acute providers to coordinate treatment while reducing avoidable readmissions, emergency visits, complications and unnecessary Medicare spending.
CJR-X will be the first expanded mandatory test of an episode-based payment model, according to CMS.
The initiative builds on the Comprehensive Care for Joint Replacement Model, which operated from April 2016 through December 2024. CMS said the earlier model saved Medicare more than $100 million while maintaining patient care quality.
“CJR-X gives more patients the opportunity for a better care experience when undergoing joint replacement surgery,” CMS Innovation Center Director Abe Sutton stated.
Most hospitals paid through the Inpatient Prospective Payment System will be required to participate. Potential exemptions include hospitals enrolled in the Transforming Episode Accountability Model, facilities in Maryland and hospitals not paid under both the inpatient and outpatient prospective payment systems.
Medicare beneficiaries will retain the ability to choose their physicians, and CMS said the model will not change how patients obtain care.
Separately, CMS finalized a 2.3% payment-rate increase for inpatient hospitals and long-term care hospitals for fiscal 2027, reflecting updated hospital cost data.
The payment policies and quality-reporting changes are detailed at https://www.cms.gov/newsroom/fact-sheets/fy-2027-hospital-inpatient-prospective-payment-system-long-term-care-hospital-prospective-payment.
Additional information about CJR-X is available at https://www.cms.gov/priorities/innovation/innovation-models/cjr-x.
The final rule, CMS-1849-F, is available at https://www.federalregister.gov/d/2026-15833.
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