This April will mark a decade since CMS launched the Comprehensive Care for Joint Replacement model, the federal government’s first mandatory, episode-based payment program applied broadly to hospitals.
CJR required hospitals in 67 randomly selected metro areas to take financial accountability for the full 90-day episode of hip and knee replacements, putting post-acute care, surgeon behavior, implant costs and readmissions into a single performance frame.
The model was supposed to prove that bundled payments could work at scale, not just among volunteer early adopters. Ten years later, with its successor, the Transforming Episode Accountability Model (TEAM), now live in hospitals across the country, Becker’s asked researchers and hospital leaders: Did CJR build lasting operational muscle, or was it a policy experiment whose lessons faded?
The most recent CMS evaluation of the model, a seventh annual report published in December, found that CJR generated an estimated $112.7 million in Medicare savings across performance years six and seven, or roughly $1,142 per episode. That was a reversal from the model’s first five years, which resulted in overall losses to Medicare, driven largely by voluntary participants who have since exited the program. But even in the later years, CMS found the model “did not lead to changes in quality of care” on claims-based measures of readmissions, emergency department use, mortality and complications. The agency’s final evaluation of the model is expected to be published later this year.
“No improvement in outcomes, no improvement in access, no improvement in equity, and paying out more money than the savings … it just does not seem to me to be worth it, though conceptually it makes good sense,” Karen Joynt Maddox, MD, MPH, a professor at Washington University School of Medicine in St. Louis, said.
Dr. Joynt Maddox said that across the bundled payment programs she has studied, including CJR, the Bundled Payments for Care Improvement (BPCI) initiative and its successor BPCI Advanced, the effects have been small. Her research on BPCI found roughly $50 in savings per episode and 0.04 additional healthy days at home per patient. Those findings are statistically significant across large populations, but marginal because of the administrative burden hospitals took on.
“They aren’t really bundled payment programs,” she said. “We call them bundled payment programs. They’re not bundled in any way, shape or form. They’re target price programs, which is a much less catchy term.”
According to Dr. Joynt Maddox, hospitals had no incentive to cut their own inpatient revenue, so savings came almost entirely from reducing post-acute care, primarily skilled nursing facility use and inpatient rehabilitation. CMS’ evaluation also confirmed that CJR’s payment reductions were driven by decreases in inpatient rehabilitation facility spending, not changes in the hospitalization itself.
That dynamic created a problem for academic medical centers and safety-net hospitals treating more complex patients. A University of Florida study published in 2023 found that its CJR participation saved Medicare an estimated $16.4 million over five years while dramatically improving quality. Length of stay dropped 56%, readmissions fell from 17.7% to 5.1%, and complications decreased from 6.5% to 2%. Despite those results, the hospital was penalized more than $300,000 at the end of its participation. The authors attributed the penalty to benchmark changes and the removal of healthier patients from the CJR-eligible pool as joint replacements moved to outpatient settings.
“It is important to emphasize that CJR hospital payments and penalties are a zero-sum calculation in which payments to ‘high performing’ hospitals are derived from penalties on ‘low performing’ hospitals — not from CMS cost savings as in a traditional gainsharing model,” the study’s authors wrote.
Dr. Joynt Maddox said changes to how CMS benchmarked hospitals midway through the program shifted the model’s financial rewards in the wrong direction. When CMS moved from hospital-specific historical benchmarks to regional ones, already-efficient suburban hospitals benefited, while safety-net hospitals treating patients with greater medical and social needs lost.
Her research, published in JAMA Health Forum in 2022, quantified how stark the disparities became. By 2019, 87.9% of safety-net hospitals mandated to participate in CJR were penalized, compared to 52.8% of all mandatory participants. Hospitals serving high proportions of Black and Hispanic patients were penalized at a rate of 71.7%. The gaps widened after two overlapping policy changes: CMS allowed hospitals in lower-spending areas to exit the model, and it shifted target prices away from hospital-specific benchmarks that accounted for each institution’s patient mix.
“These programs should be used to help the highest spenders and the most complicated patients, not to give money to the hospitals that are already doing well,” she said.
Still, some systems say the model built durable operational capabilities, even if the financial incentives were flawed.
Jennifer Waterbury, director of government programs and opportunity insights at Altamonte Springs, Fla.-based AdventHealth, said the system’s financial performance under CJR was favorable overall, with the exception of one performance year as benchmarks evolved. More importantly, she said, the workflows AdventHealth built did not end when the model did.
“Many of the workflows and capabilities we developed did not end when CJR ended,” Ms. Waterbury said. “Elements such as patient education, multidisciplinary collaboration and episode tracking are still in use today and now support the implementation of the CMS TEAM model.”
AdventHealth’s experience mirrored the broader pattern, with savings coming from post-acute care management, not from changes to the surgery itself. But Ms. Waterbury said CJR’s most lasting contribution was in physician engagement and care coordination.
“Across CJR and BPCI-A, the most important lesson we learned was that outcomes are shaped far beyond the operating room,” she said. “The surgery is one moment, but recovery and confidence are built in the days and weeks that follow.”
Proactive post-discharge check-ins were especially impactful, she said, and that approach is now central to AdventHealth’s TEAM implementation.
For hospital leaders now operating under TEAM, Dr. Joynt Maddox cautioned that the post-acute landscape has changed dramatically since CJR launched. Skilled nursing facility use is down, driven by both a lack of supply and Medicare Advantage plans’ aggressive management of post-acute utilization. Hospitals have far fewer fee-for-service patients than they did a decade ago, making it harder to justify investments in care redesign that only applies to a shrinking part of their patient volume.
“Hospitals are going to have to really know what their post-acute setup is and think very creatively about how they’re going to do that,” she said. “From a policy standpoint, I think [CJR has] been a failure. But I think there are still things we have learned from it.” She added that most value-based payment programs have become “fairly irrelevant” in driving meaningful change, with the exception of some accountable care organizations.
At AdventHealth, Ms. Waterbury said CJR gave the system clarity on what works in episode-based care, particularly around early physician engagement, and those insights are directly shaping its approach to TEAM.
“CJR showed us what worked, what didn’t, and how important early, transparent physician engagement is in episode-based models,” she said.
