Knee, hip and ankle replacements are among the most frequent surgeries for people with Medicare.
That’s why since 2016, the Centers for Medicare and Medicaid Services has been experimenting with value-based care models tied to joint replacement. And last week, CMS proposed expanding the Comprehensive Care for Joint Replacement Model (CJR Model).
The CJR Model holds hospitals responsible for Medicare spending for joint replacement surgery, the hospital stay and the first 90 days of recovery. Between 2016 and 2024, the CJR Model was tested in 34 metropolitan areas. The expanded model (called CJR-X) would be made mandatory nationwide and begin October 1, 2027. With CMS rulemaking, there is typically a 60-day comment period, with a final rule expected in the late summer.
“This proposed expansion of our successful joint replacement pilot program would better align financial incentives with improved health outcomes—protecting taxpayer dollars while ensuring patients get the care they need before, during, and after surgery,” said CMS Administrator Dr. Mehmet Oz in a statement.
Several healthcare experts say the expanded model is a logical step, though they have concerns about its implementation.
“Mandatory nationwide participation is an enormous operational lift for hospitals that have never engaged in value-based payment,” said Steve Farmer, senior partner at advisory firm ABIG Health and former chief strategy officer for coverage at CMS.
What is CJR-X?
In Medicare fee-for-service, providers are paid separately for lower extremity joint replacement (LEJR) surgery and each service in the recovery period. This often leads to “fragmented care, duplicated use of resources, and avoidable utilization, leaving patients feeling unsupported and at greater risk of post-operative complications and avoidable health care expenditures,” according to CMS.
The CJR-X model, however, holds hospitals accountable for the total cost and quality of care during an entire episode — from the surgery through 90 days of recovery. Medicare sets a target spending level for that episode, and after the fact, hospitals may receive a bonus if they keep costs low while maintaining quality or repay money if costs exceed the target.
“Patients would have a more seamless, better care experience through the CJR-X Model, allowing them to focus on recovery instead of acting as the go-between for their own care,” said CMS Innovation Center Director Abe Sutton in a statement.
Most hospitals paid under the Inpatient Prospective Payment System would be mandated to participate in CJR-X. However, some hospitals would be exempt, such as those participating in the Transforming Episode Accountability Model (TEAM). TEAM is testing a similar episode based-payment model, and it includes non-LEJR procedures like heart surgery and spinal fusion. However, it has an episode length of 30 days, versus CJR-X’s 90 days.
When TEAM ends in 2030, hospitals will then be required to participate in CJR-X.
It’s worth noting that the tested CJR model has proved successful in reducing costs. It achieved $112.7 million in savings from 2021 to 2023, according to CMS.
What experts are saying
To Hal Andrews, CEO of healthcare analytics company Trilliant Health, bundling payments for hip, knee and ankle replacements is an obvious place to start when it comes to value-based care.
He noted that hip, knee and ankle replacements have very predictable outcomes. Unless there is a mistake in surgery, the only variance in outcomes is whether or not a patient does physical therapy, he declared.
“If you don’t start with hips and knees, then everything else you’re talking about in value-based care is sort of a joke,” Andrews said. “Everything else is too unpredictable. … I think that’s why it’s a foregone conclusion that if we’re really going to do value-based care for all traditional fee-for-service Medicare beneficiaries by 2030, you have to start with something that is a high-volume surgery that’s also very susceptible to a bundle and has a very simple care pathway.”
Andrews’ colleague, Trilliant Chief Research Officer Allison Oakes, noted that many alternative payment models that CMS has tested ended up with adding costs to the system whereas CJR actually achieved savings. So it makes sense that CMS is doubling down on CJR.
According to Adam Brown, an emergency physician and founder of ABIG Health, CJR-X is building upon a proven alternative payment model that aligns incentives across the entire episode of care.
However, since the program is mandatory, there could be challenges implementing the model, especially for smaller hospitals that may not have the infrastructure to manage 90-day episodes.
“Overall, aligning incentives is a good idea, but it will require thoughtful implementation or exclusions to avoid unintended pressure on less resourced providers,” Brown told MedCity News.
The American Hospital Association also expressed concerns over making the model mandatory.
“While we appreciate CMS’s efforts to expand the reach of value-based models, we believe that mandatory participation presents significant challenges, particularly for hospitals that lack the scale or financial capacity to make the necessary investments in care redesign,” said Ashley Thompson, AHA’s senior vice president for public policy analysis and development. “A phased or voluntary approach would better support success, allowing organizations to build the infrastructure and partnerships needed to achieve shared savings and improved outcomes.”
Andrews, meanwhile, argued that making the model mandatory is necessary; otherwise, hospitals will cherry‑pick when to participate, opting in only for cases where they know they can beat the benchmark. He pointed to the Bundled Payments for Care Improvement Initiative, which was a voluntary Medicare program that paid providers a single bundled amount for an episode of care to encourage coordination and reduce costs.
“[The hospitals] just picked their winners,” Andrews said. “They took fee-for-service when they weren’t going to win on bundled payment, and they opted into BPCI where they could win on the bundled payment. Any hospital that knew what they were doing made money either way.”
It’s worth noting that there are other value-based programs that are mandatory, such as the Hospital Readmissions Reduction Program, which puts hospitals on the hook for readmissions for 30-days following procedures for heart failure, pneumonia and other conditions. The program started in 2012. However, this is a capped, downside-only adjustment, whereas CJR-X puts hospitals at risk for both cost and quality across a full 90-day episode, which is a bigger shift in accountability, Farmer said.
Beyond the mandatory provision, the 90-day window in CJR-X may also pose challenges compared with TEAM’s 30-day window, Farmer noted.
“The 90-day episode window in CJR-X contrasts with TEAM’s 30-day window,” he said. “Shorter episode windows (e.g., 30 days) tend to focus incentives on immediate post-discharge care decisions, while longer episode windows (e.g., 90 days) extend accountability to downstream complications, care coordination, and readmissions.”
Photo: atibodyphoto, Getty Images
