The Road Ahead: Scaling Care Transformation in Preparation for CJR-X

August 6, 2026

The Centers for Medicare & Medicaid Services (CMS) recently established CJR-X, a national episode- based payment model for lower extremity joint replacement (LEJR) procedures in the FY 2027 Medicare Inpatient Prospective Payment System (IPPS) Final Rule. This bundled payment model assesses cost and quality for 90-day episode for inpatient and outpatient hip, knee, and ankle replacements.

Beginning January 1, 2028, most acute care hospitals nationwide will be required to participate in CJR-X. CMS delayed the start by three months to provide hospitals with additional pre-implementation time.

CMS estimates that CJR-X will generate approximately $725 million in Medicare savings over its first five performance years. Because the model has no specific end date, CMS expects savings and care improvements to continue beyond the initial performance period.

The implications are substantial. For the first time, orthopedic bundled payments will operate at a near-universal national scale, providing a more complete picture of episode-based payment performance across diverse providers, markets, and patient populations.

Beyond Early Wins: CJR-X Challenges

The original CJR model demonstrated that episode-based accountability can improve care coordination while reducing Medicare spending. Much of the early savings stemmed from redesigned clinical pathways, reduced use of high-cost post-acute care settings, and investments in care management infrastructure.

The environment facing providers under today’s CJR-X model is markedly different. Joint replacement episode spending has already declined substantially and stabilized, meaning many of the most accessible opportunities for cost reduction have already been captured. As a result, generating incremental savings will be increasingly difficult.

Under CJR-X, hospitals will be measured against regional risk-adjusted target prices that include capped normalization and trend factors. While these policies are intended to create more equitable benchmarks, providers may nevertheless face pressure to deliver additional savings against benchmarks that continue to decline over time. This dynamic can compress margins and limit participants’ ability to reinvest in care redesign, data analytics, care coordination, and quality improvement initiatives.

Safety-net hospitals face additional challenges. CMS finalized policies that better account for patient complexity, social risk factors, resource utilization, and uncompensated care. Even with these adjustments, many safety-net providers serve patients with complex medical and social needs that are only partially reflected in risk-adjustment methodologies and can contribute to higher episode spending.

Many safety-net and rural hospitals also operate on narrower financial margins, have lower procedure volumes, and have fewer resources to support large-scale care transformation efforts. With limited capacity to absorb downside risk, these organizations will need to carefully target investments that improve care management, reduce avoidable utilization, and support long-term performance under increasingly competitive benchmarks.

Key Priorities for Sustaining and Scaling Impact in Practice

Scaling the success of the original CJR model nationwide will require participating hospitals to move beyond early care redesign efforts and focus on sustaining performance through stronger care coordination, operational efficiency, and effective management of patient complexity. Health systems will need to consider:

  • Leverage Existing Infrastructure
    Maximize the value of existing clinical pathways, care management capabilities, integrated workflows, risk stratification tools, and operational infrastructure. Utilizing existing data collection and reporting capabilities can help reduce administrative burden, avoid reinvention, and accelerate adoption through proven channels.
  • Strengthen Physician Engagement and Care Coordination
    Success under CJR-X will require deeper alignment across primary care, specialty care, and hospital-based teams. Organizations should prioritize coordinated physician engagement strategies, standardized communication protocols, and clearly defined handoff processes across all care settings. Strong alignment between primary care providers and specialists, supported through ACO and value-based care structures, can create economies of scale while improving continuity throughout the episode of care.
  • Align Patient Attribution, Outreach, and Engagement
    Improve clarity on which patients are in scope, update patient criteria, and communicate consistently across beneficiary outreach and engagement efforts. Participants will need scalable approaches to patient engagement, including risk stratification, targeted outreach workflows, and proactive intervention strategies. Equally important is defining accountability when patients appear on multiple registries, worklists, or value-based programs, ensuring care teams operate from a coordinated rather than fragmented approach.
  • Enhance Analytics for Multi-Model Performance
    As participation in multiple value-based models becomes increasingly common, organizations will need more sophisticated analytics capabilities to understand model overlap, measure performance accurately, and calculate accurate savings attribution that supports equitable distribution. Advanced analytics can also provide insights into specialist engagement patterns, referral relationships, site-of-service utilization, provider access and availability, and opportunities to strengthen alignment across employed and affiliated physician networks.
  • Address Safety-Net and Rural Hospital Challenges
    Safety-net and rural hospitals face unique hurdles as they care for high-risk, complex patients while managing resource constraints, lower procedure volumes, workforce limitations, and reduced access to care management infrastructure. Organizations serving vulnerable populations may need targeted support, strategic partnerships, and focused investment approaches to participate successfully while managing financial risk and maintaining access to care.
  • Prioritize Transitions of Care
    Organizations that successfully standardize and optimize transitions of care will be better positioned to improve patient outcomes while managing episode costs and reducing avoidable readmissions. Focus on high-impact transition points by defining shared responsibilities of care teams, strengthening patient pre-discharge education, improving discharge planning, and coordinating smooth post-acute coordination:
    • Pre-discharge patient education to set expectations and reduce avoidable utilization
    • Effective discharge planning and transition management to ensure smooth care transitions from acute settings to home, community-based care, or post-acute services
    • Post-acute care coordination to integrate effective communication between acute settings, primary care providers, specialists, post-acute services, home health agencies, and community-based providers

Conclusion

The success of CJR-X will depend on evolving successful strategies of the past to reflect a more mature value-based care landscape – one where efficiency gains are incremental, operational complexity is real, and sustainability hinges on alignment, flexibility, and reinvestment.

NAACOS encourages members to stay informed through our events and webinars. Join the discussion at the NAACOS Fall Conference. A featured panel in “Driving Value in Episodic Care: Practical Strategies for CJR-X and TEAM,” will share implementation lessons, operational best practices, and strategies for success under CJR-X and TEAM.

Stay engaged through our Specialty Care Roundtable Discussions, which offers a forum to share real-world experiences, surface challenges, and learn from peers operating within CJR‑X and other specialty care models. NAACOS has also developed practical resources – Specialty Engagement Toolkit to help organizations operationalize these models more effectively, from care redesign to performance tracking.

As markets mature and competition for incremental savings intensifies, organizations that successfully adapt will be positioned not only to sustain performance, but also to scale it. CJR-X has the potential to fundamentally reshape orthopedic episodic care, where scalability, long-term sustainability, and continued innovation can coexist.