On September 24th, CMS released the final evaluation report for the Comprehensive Care for Joint Replacement (CJR) Model. The report showed $180 million in Medicare savings during the three performance years from October 2021 to December 2024, with care quality preserved. This report matters to health system leaders around the U.S. as they prepare to participate in the CJR Model’s successor program, Comprehensive Care for Joint Replacement Expanded (CJR-X). CJR-X is an example of CMS using learnings from previous models to expand bundled payment participation. By requiring participation and adjusting target prices for patient risk and hospital quality, CMS aims to make savings more consistent under the new model.

A Quick Refresh: Federal Experiments with Bundled Payments
The Agency created bundled payments to address a fee-for-service Medicare weakness: the lack of coordination of care and the need to lower total cost of care while maintaining quality. CJR-X is the first nationwide mandated bundled payment model, slated to begin January 1, 2028. 

  • CMS started with voluntary bundled payment models in 2013 with the Bundled Payments for Care Improvement (BPCI) initiative. BPCI Models 1 through 4 concluded in 2018, then BPCI Advanced operated from October 2018 through December 2025 and included medical and surgical episodes extending 90 days beyond discharge or completion of an outpatient procedure. BPCI produced mixed success: the original models lost Medicare money after reconciliation payments, while BPCI Advanced generated about $800 million in net savings after CMS updated the model in 2021. Both maintained quality but did not measurably improve it.  
  • In April 2016, a new program, CJR, required hospitals in 67 randomly selected metro areas to participate in the program, later narrowing the number to 34 high-spending areas. Selected hospitals became accountable for eligible hip and knee replacement episodes through 90 days after discharge. In 2021, the model was extended for three more years with the addition of new outpatient services, pricing and risk adjustment. This extension generated the $180 million in savings reported by CMS in September. CJR concluded on December 31, 2024. 
  • This year, on January 1, 2026, the Transforming Episode Accountability Model, or TEAM, began. It expands surgical episodes to five categories: joint replacement, surgical hip and femur fracture treatment, spinal fusion, coronary artery bypass graft surgery and major bowel procedures. TEAM uses a 30-day recovery window and requires referral to primary care. CMS lists 716 participating hospitals in selected regions. The model will run through December 2030. 
  • Finally, starting January 1, 2028, CJR-X will begin. It will keep the original CJR 90-day window and will focus on lower extremity joint replacement only, unlike TEAM. Most Inpatient Prospective Payment System (IPPS) hospitals will be mandated to participate in the program, except for hospitals that are currently in TEAM and located in Maryland. Unlike all the previous bundled payment programs, CJR-X currently has no end date. 

Learnings from the Original CJR
The final evaluation of the first CJR model examined 321 hospitals and more than 143,000 joint replacements, with more than 48,000 inpatient procedures and more than 94,000 outpatient procedures.  

  • The report showed $180 million in Medicare savings during the three performance years from October 2021 to December 2024. The estimated $180 million in net Medicare savings combined $136 million in lower episode spending with $44 million in net repayments from hospitals to CMS. 
  • CJR hospitals cut elective joint replacement spending by $1,226 per episode relative to comparison hospitals, and post-acute care was a key driver. Hospitals sent fewer patients to inpatient rehabilitation facilities, cutting that spending by an estimated $443 per episode. More patients recovered at home with home health services. These are the same policy levers hospitals will be expected to pull under CJR-X. 

How CJR-X Will Work
Starting January 1, 2028, participating hospitals will be accountable for Medicare spending associated with eligible joint replacement episodes, beginning with the procedure and extending through 90 days after discharge for inpatient procedures or 90 days after the procedure for outpatient episodes. Medicare will continue to pay hospitals and clinicians through fee-for-service reimbursement during the year. After each year performance year, CMS will compare actual episode spending with the hospital’s target price and determine whether the hospital will get a reconciliation payment or repay CMS for the overspend. 

  • Participants: Most hospitals (excluding Maryland and TEAM participants) paid under both Medicare’s IPPS and Outpatient Prospective Payment System (OPPS) will be included. Eligible TEAM hospitals will transition to CJR-X when TEAM ends on December 31, 2030. Hospitals with fewer than 31 joint replacement episodes in the applicable baseline period are not financially accountable for that performance year. 
  • Procedures: The model will cover inpatient hip, knee and ankle replacements, including hip replacements after a fracture, plus outpatient total knee and total hip replacements. Episodes start only in hospital setting (inpatient or outpatient). 
  • Pricing: CMS will establish regional target prices built from three years of historical spending, adjusted with the same 29 risk factors TEAM uses. The standard 2% discount drops to 1% or 0% for hospitals with “good” or “excellent” quality scores. 
  • Risk: Hospitals will face two-sided risk from the first year. Gains and losses are capped at 20% of target prices, while safety-net, rural, Medicare-dependent and sole community hospitals have a 5% loss cap.  
  • Quality: CMS will calculate a composite quality score using five measures capturing complications, patient experience and patient-reported outcomes. Hospitals below an acceptable score cannot earn reconciliation payments.  
  • Tools for Care Coordination: CMS will share spending data, waive certain Medicare rules and allow gainsharing with surgeons and post-acute providers. Episodes count regardless of a patient’s ACO alignment.  

Lingering Questions
For health systems, several questions remain: Will the expanded risk adjustment adequately account for patients with complex needs? Will financial protections be sufficient for rural and safety-net hospitals? And will the model preserve access to appropriate surgery, rehabilitation and post-acute care?

 

AHPA extends our gratitude to Nikita Leukhin, guest author of this article.
Nikita is a Management Leadership Resident in AdventHealth’s Primary Health Division 

Topics: CMS, Medicare