Hospitals to Join CJR-X Bundled Payment Model in 2028
More than 2,200 hospitals will transition to a new mandatory bundled payment model for joint replacements in 2028.
Updated on Oct. 29, 2026 in Healthcare
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Beginning January 1, 2028, over 2,200 acute care hospitals across 49 states will be required to participate in the CMS mandatory CJR-X bundled payment model for lower extremity joint replacements. This initiative establishes regional, risk-adjusted target prices to drive episode-based payment accountability.
Why it matters
CMS aims to enhance cost and quality accountability for joint replacement procedures by shifting hospitals toward a model that rewards efficiency. Hospitals that successfully beat regional target prices while meeting specific quality benchmarks will be eligible for reconciliation payments.
Participating hospitals face a 2% target price discount and a maximum gain or loss cap of 20%, though rural and safety-net facilities have a capped loss limit of 5%. Alignment payments between hospitals and their collaborators are restricted to 50% of the hospital's total repayment amount.
The players
Centers for Medicare and Medicaid Services
This federal agency is a component of the Department of Health and Human Services and manages the Medicare program, Medicaid, and the Children's Health Insurance Program.
The details
Under the new model, hospitals are responsible for costs and quality outcomes over a 90-day episode for specific joint replacement procedures. To ensure compliance with federal law, facilities must enter into collaborative agreements that align with existing Stark Law exceptions and Anti-Kickback Statute safe harbors.
Timeline
July 31, 2026: CMS issued the FY 2027 Inpatient Prospective Payment System final rule.
October 2026: CMS published the formal CJR-X Participant List.
2027: Hospitals undergo a pre-implementation year to align their operations.
January 1, 2028: Mandatory participation in the CJR-X model officially begins.
Market Landscape
The CJR-X model represents a major shift toward mandatory value-based purchasing, mirroring the broader industry push to move away from fee-for-service structures. It forces a standardization of care pathways across the nation, positioning CMS as a primary driver of operational efficiency in healthcare.
Patients may notice hospitals adjusting their preferred surgical providers or post-acute care partners to align with the new model's cost targets. These changes are intended to standardize outcomes, though they require hospitals to manage resources more strictly to avoid penalties.
The takeaway
Hospitals should begin evaluating their collaborative agreements and quality metrics now to prepare for the 2028 implementation date. Ensuring compliance with existing federal safe harbors remains critical for sharing savings or losses under these new bundled payment terms.
Further reading
Learn more about federal health policy and payment initiatives at Healthcare.
Source note: This article includes information reported by The National Law Review - A Free To Use Nationwide Database of Legal Publications.
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