Everything You Need to Know About CJR-X — The Mandatory Joint Replacement Model Coming in 2028

APMConnect
22 hours ago
8 min read

Published on APM Connect | August 2026

If you run an acute care hospital that performs hip and knee replacements, you need to know about CJR-X. Starting January 1, 2028, virtually every eligible acute care hospital in the country will be required to participate in a new bundled payment model for lower extremity joint replacement with immediate downside risk.

This is not a voluntary pilot. It is not limited to select geographies. It is a mandatory, national, permanent program that will fundamentally change how your hospital is paid for joint replacement surgeries and hold you accountable for what happens to patients for 90 days after they leave your building.

Here is what you need to know.

What Is CJR-X, and Where Did It Come From?

CJR-X stands for Comprehensive Joint Replacement (Expanded), and it is the successor to two prior CMS models: the original Comprehensive Joint Replacement (CJR) model, which ran from 2016 to 2024, and the TEAM model (Transforming Episode Accountability Model), which is currently running. CMS has used this sequence of models to test and refine how bundled payments for joint replacements work. With CJR-X, the agency is declaring that testing is over. CMS has explicitly stated that CJR-X is "not being proposed as a finite model test that will occur over a relatively short period of time." This is a permanent shift in how joint replacement care is paid for under Medicare.

The original CJR covered only inpatient hip and knee replacements and applied only to hospitals in randomly selected metropolitan areas. CJR-X eliminates both of those limitations. It covers inpatient and outpatient procedures, and it applies to almost all acute care hospitals nationwide.

Who Has to Participate?

If your hospital is an acute care hospital that performs lower extremity joint replacements paid under both the Inpatient Prospective Payment System (IPPS) and the Outpatient Prospective Payment System (OPPS), and you are not in the TEAM model, you are in. Participation is mandatory. Critical Access Hospitals (CAHs) are excluded because they are not paid under IPPS, but for the broad universe of community hospitals and health systems with orthopedic programs, this model will apply.

What Procedures Trigger a CJR-X Episode?

Six procedure codes open a CJR-X episode. Four are inpatient DRGs:

DRG 469: Major hip and knee joint replacement with major complication or comorbidity (MCC)
DRG 470: Major hip and knee joint replacement without MCC
DRG 521: Hip replacement with a principal diagnosis of hip fracture with MCC
DRG 522: Hip replacement with a principal diagnosis of hip fracture without MCC

Two are outpatient HCPCS codes — and this is new. Neither the original CJR model nor TEAM covered outpatient joint replacements. CJR-X does:

27130: Total hip arthroplasty, primary
27447: Total knee arthroplasty, primary

The addition of outpatient triggers is significant. As CMS has removed total hips and total knees from the Inpatient-Only list, hospitals have shifted significant volume to outpatient settings. CJR-X holds hospitals accountable for the full episode regardless of whether the procedure was performed inpatient or outpatient. One note: outpatient total ankle replacements are not included in CJR-X at this time (only inpatient ankle replacements).

What Does "Episode" Actually Mean?

Under CJR-X, an "episode" begins on the date of the anchor admission or the date of the outpatient procedure and runs for 90 days post-discharge. Every Medicare Part A and Part B service the patient receives during that window — acute care, skilled nursing, home health, physical therapy, readmissions, physician visits, imaging, labs — is included in the episode cost, with limited exclusions.

The 90-day window is intentional. CMS is simultaneously running a 30-day episode in the TEAM model, and CJR-X's 90-day window is designed to allow a direct comparison so CMS can ultimately determine the optimal episode length. The 90 days captures the full post-acute arc of recovery, which is where the greatest variation in spending, and the greatest opportunity to improve care, typically lives.

If a patient has an outpatient procedure that is converted to an inpatient admission within 3 days (a not-uncommon scenario), the outpatient episode is canceled and the inpatient episode takes over, with the same start date. This aligns with Medicare's existing 3-day payment window rules.

Not everything in those 90 days counts. CMS proposes to exclude certain categories of spending that are unrelated to the joint replacement, including admissions for oncology, trauma, organ transplants, and specific other conditions. High-cost drugs and biologics and new technology add-on payments will also be excluded. CMS will publish the complete exclusion lists on the CJR-X webpage before preliminary target prices are released — they cannot finalize the lists sooner because some exclusions are based on how frequently certain items appeared during the 2024–2026 baseline period, which has not yet concluded.

How Will Hospitals Be Paid or Penalized?

This is the crux of what CJR-X means operationally, and it requires understanding a few concepts.

Target prices are regional, not hospital-specific. CMS will calculate a target price for each episode type (each DRG and each HCPCS code) based on regional average spending — meaning your hospital will be compared to your regional peers, not to your own historical performance. This is a deliberately achievement-based design: hospitals that have historically been more expensive than their region will find it harder to generate savings than those that have historically been efficient.

Target prices are set using 3 years of baseline data, trended forward and adjusted for expected spending growth. CMS will provide preliminary target prices to participants by the end of November before each performance year.

Risk adjustment matters. CMS proposes to risk-adjust target prices at reconciliation using a methodology adapted from TEAM, accounting for hospital bed size and safety net status, patient age, HCC count (a measure of chronic disease burden), beneficiary economic risk, prior post-acute care use, disability status as the reason for Medicare enrollment, and recent medical history. This is designed to ensure that hospitals serving higher-complexity patients are not systematically disadvantaged.

The discount factor is 2%. Medicare retains 2% of the benchmark as its share of savings. This means a hospital must perform at least 2% below the regional target price before it sees any reconciliation payment.

Quality adjusts your payment. Your hospital's Composite Quality Score (CQS) can adjust the 2% discount factor in your favor. The CQS creates four tiers based on quality performance: hospitals with “excellent” quality results will have a 0% discount factor, “good” performers will have a 1% discount factor, while “acceptable” and “below acceptable” performers will face the full 2% discount.

Stop-loss and stop-gain limits are symmetric at 20%, matching the original CJR model. Rural hospitals, sole community hospitals, and safety net hospitals receive additional protection with a 5% stop-loss limit, meaning their maximum downside exposure is capped at 5% of their aggregate reconciliation target price.

Post-episode spending matters too. CMS will monitor whether your average spending in the 30 days after the episode ends is more than 3 standard deviations above the regional average. If it is, you will owe CMS for the excess — a provision specifically designed to prevent hospitals from gaming the model by deferring medically necessary care until after the 90-day window closes.

How Is Quality Measured?

CJR-X uses a Composite Quality Score built from five measures across three domains:

Complications (50% weight): The complication domain carries the most weight through the measurement of risk-standardized complication rates after THA/TKA inpatient surgery and hospital visits within 7 days of outpatient surgery.

Patient Experience (40% weight): Patient experience data captured through existing HCAHPS and OAS CAHPS surveys carries the second-largest weight.

Patient-Reported Outcomes (10% weight): CMS proposes to use the THA/TKA Patient-Reported Outcome Performance Measure (PRO-PM), expanding on data voluntarily submitted to HIQR under the original CJR model. CMS is intentionally weighting PROs more heavily than in prior models, signaling a long-term intent to move in this direction. Hospitals that have not yet invested in PRO collection infrastructure should treat this as a strategic priority.

Performance on each measure is translated to a percentile based on the national distribution among IPPS hospitals, and those percentiles are converted to points to calculate an overall Composite Quality Score (CQS). As stated above, the CQS directly affects the discount factor to your benchmark.

What New Operational Requirements Come With CJR-X?

Beyond the financial mechanics, CJR-X creates a set of operational obligations that hospital leaders should understand now.

Beneficiary notification is required. Before every patient is discharged, your hospital must provide written notice explaining the model, the patient's care options, and the identity of any CJR-X collaborators involved in their care. Any collaborators — post-acute providers, physician groups, rehabilitation facilities — must also provide written notice the first time they furnish services to a CJR-X patient.

Sharing arrangements require governance. Your hospital's board must formally oversee CJR-X participation, collaborator arrangements, gainsharing payments, and beneficiary incentives. Hospitals must develop written policies for selecting collaborators. The selection criteria must include quality of care delivered, and cannot be based on referral volume or value. Collaborator lists must be updated at least quarterly and publicly posted on your hospital's website.

Gainsharing payments have rules. Reconciliation savings can be shared with physicians, post-acute providers, and other collaborators, but these arrangements must be forward-looking (terms set before performance results are known) and gainsharing must be distributed no more than once per calendar year. Alignment payments (when collaborators contribute to a hospital's repayment obligation) are capped at 50% of the repayment amount in aggregate, and no single non-ACO collaborator can contribute more than 25%.

Three Medicare Waivers That Change What You Can Do

CJR-X comes with three regulatory waivers that expand what hospitals and their partners can offer patients during the 90-day episode.

Post-discharge home visits. CMS proposes to waive the "incident to" billing rule to allow nurses and other clinical staff — employed by the hospital or not — to conduct post-discharge home visits under the general supervision of a physician, for patients who do not qualify for home health. Up to 9 visits per 90-day episode are allowed. Each visit would be billed under a new G code at approximately $50. CMS also proposes to waive surgical global period billing rules, which currently prohibit separate billing for post-operative follow-up care furnished during the 90-day global period — a provision that would unlock the ability for the operating surgeon or other practitioners to furnish and bill for these home visits.

Telehealth geographic waivers. Beneficiaries anywhere in the country — not just rural areas — can receive telehealth services during the episode, including in their home.

SNF 3-day waiver. Hospitals can waive Medicare's usual requirement that a patient spend 3 days in an acute care hospital before qualifying for covered skilled nursing facility care — but only at SNFs rated 3 stars or better for at least 7 of the most recent 12 months. CMS will post the list of qualified SNFs on its website before each calendar quarter.

What About Hospitals Already in MSSP or Other Models?

CJR-X will coexist with the Medicare Shared Savings Program and other total-cost-of-care models. CMS proposes to allow hospitals to retain savings generated in CJR-X and also have their MSSP ACO retain any contribution to MSSP savings from the same episode. CJR-X episode spending will be counted in MSSP's total expenditure calculations, but the CJR-X reconciliation payment itself will not be included — and vice versa. This is a meaningful departure from the original CJR model, under which concurrent participation in CJR and MSSP Enhanced was not permitted.

CJR-X and TEAM will not overlap. Hospitals in TEAM will not simultaneously be in CJR-X for the same episodes.

What Should Hospital Leaders Do Now?

CJR-X starts January 1, 2028, but the decisions that will determine your hospital's financial performance under this model start well before that.

The first priority is understanding your current cost position relative to your region. Because CJR-X uses regional target prices, your hospital's baseline efficiency relative to peers is the single biggest predictor of whether the model will generate savings or losses. That analysis should be underway now.

The second priority is your post-acute network. The 90-day episode is where the greatest cost variation lives — skilled nursing, home health, and readmissions. Hospitals with tightly managed post-acute relationships and data-driven discharge planning will have a significant structural advantage.

The third priority is PRO collection infrastructure. The model weights patient-reported outcomes at 10% of the quality score, and CMS has signaled a clear intent to expand that weight over time. Hospitals without PRO collection workflows should begin building them now.

Stay connected as CJR-X moves toward implementation. Join CJR-X Connect — a community for hospital leaders navigating the model — for timely updates, peer discussion, and practical guidance as the final rule takes shape and the January 2028 start date approaches.

For the full proposed rule, see: Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule

This post is intended for informational purposes. Readers should consult the full proposed rule text and legal counsel before making compliance or operational decisions based on proposed — not yet finalized — provisions.