Most hospitals aren’t ready for Medicare’s mandatory joint replacement bundle, according to a Duke surgeon leading his system’s preparation.
CMS finalized the Comprehensive Care for Joint Replacement Expanded model July 31 in its fiscal 2027 inpatient payment rule. Starting Jan. 1, 2028, the model makes participating hospitals financially accountable for hip, knee and ankle replacements in Original Medicare. As of Sept. 30, 2,217 acute care hospitals were set to participate. An episode runs from surgery through 90 days after discharge and includes both inpatient and hospital outpatient procedures.
CMS projects the model will save Medicare $736 million over five performance years. The original CJR model covered about 800 hospitals from 2016 to 2024 and produced an estimated $112.7 million in net savings from 2021 to 2023.
“The majority of hospitals haven’t convened those stakeholders, and they’re gonna get hit in the face with like a sack of bricks come January 1, 2028,” said Christian Pean, MD, assistant professor of orthopedic surgery and executive director for AI and IT innovation at Duke University School of Medicine in Durham, N.C., and Duke’s point person on CJR-X. He spoke Oct. 30 at Becker’s 32nd Annual Business and Operations of ASCs conference in Chicago.
Duke has had about 40 stakeholders meeting every week for the past month. Dr. Pean called the model “a paradigm shift” and “a forcing function” for redesigning care.
Duke is working to understand its per-episode costs, add digital wraparound services, build a same-day surgery and ASC strategy for total joints and document the complexity of cases that stay inpatient.
Other systems are taking a similar approach. Endeavor Health’s Skokie (Ill.) Hospital is exploring a value-based enterprise to better align with its surgeons. Its president told Becker’s that outpatient total joints are “the gold standard” because “even admitting a patient for one night is going to start to erode that cost target.”
CJR-X builds on the Transforming Episode Accountability Model, a mandatory CMS bundle that began Jan. 1, 2026, for 716 hospitals. TEAM covers lower extremity joint replacement and four other surgical episodes, each 30 days long. TEAM hospitals are exempt from CJR-X until TEAM ends Dec. 31, 2030.
Hospitals carry the risk under CJR-X, but ASCs could feel it too. Hospitals may share savings with ASCs through gainsharing arrangements. CMS has not said how episodes would be attributed to freestanding, physician-owned ASCs with no ownership tie to a participant hospital.
Dr. Pean expects bundles to reach ASCs directly within three to five years.
“They’re coming to the ASCs,” he said.
He also expects unusual partnerships, including joint ventures between payers and hospitals, “the enemies usually.” He said hospitals have done “a pretty poor job” of physician alignment, which ASCs handle better.
“So it could be an opportunity,” he said.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
