What is the CJR-X Model?
The Comprehensive Care for Joint Replacement Expanded (CJR-X) Model is a proposed mandatory, nationwide bundled payment model from the Centers for Medicare & Medicaid Services (CMS) that would hold acute care hospitals financially accountable for the cost and quality of lower extremity joint replacement (LEJR) episodes across a full 90-day window, from anchor admission/procedure through 90 days post-discharge.
CJR-X is designed to build on the original CJR Model, which generated $112.7 million in net Medicare savings in performance years 6 and 7 while maintaining quality of care. The expanded model incorporates the same risk adjustment methodology used in TEAM, combining a decade of bundled payment learnings into one nationwide framework.
CMS proposed CJR-X in the FY 2027 IPPS Proposed Rule, released April 14, 2026.
Key facts:
- Proposed start date: October 1, 2027
- Duration: Ongoing, national model (performance year aligns with federal fiscal years)
- Mandatory participation: All eligible acute care IPPS/OPPS hospitals nationwide (including the District of Columbia and U.S. Territories)
- Excluded: TEAM participants, Maryland hospitals, IHS/Tribal hospitals, Critical Access Hospitals, Rural Emergency Hospitals, and Rural Community Hospital Demonstration sites
- Episodes covered: Lower extremity joint replacement (LEJR) – inpatient hip, knee, ankle; outpatient hip, knee
- Episode length: 90 days post-anchor (vs. TEAM’s 30 days)
- Reconciliation: Annual, allowing for 6 months of claims runout after each performance year ends
Keep reading to see how CJR-X payments work and how the model differs from TEAM.
How CJR-X payments work
Hospitals continue to bill Medicare fee-for-service as usual. After the performance year ends, CMS reconciles actual episode spending against a regional target price, built from three years of weighted baseline data (17% / 33% / 50%), adjusted for trend, beneficiary risk, hospital characteristics, and quality performance.
Target price formula:
Preliminary Target Price = Benchmark Price x Prospective Trend Factor x Prospective Normalization Factor x Risk Adjustment Multipliers x (1 - Discount Factor)
Three components that determine your payment:
1. Spending vs. target price
Beat the adjusted regional target and earn a reconciliation payment. Exceed it and owe Medicare a repayment, subject to stop-loss limits.
2. Composite Quality Score (CQS)
Five quality measures across inpatient and outpatient settings roll up to a 20-point CQS, which can change your discount factor (from the default 2%). Score above 17 and your discount factor drops to 0%. Score between 12.1 and 17 and it drops to 1%. Score below 6.1 and you forfeit reconciliation payments entirely, even if your spending beat target.
3. Stop-loss and stop-gain limits
| Hospital type | Stop-loss | Stop-gain |
|---|---|---|
| Most hospitals | 20% | 20% |
| Rural, Medicare-dependent, sole community, or safety net hospitals | 5% | 20% |
CMS also monitors the 30 days after each episode ends. If your average post-episode spending exceeds three standard deviations above the regional mean, you owe repayment for the excess, and stop-loss does not apply.
Next: See how CJR-X differs from TEAM, and why the distinction matters.
CJR-X vs. TEAM: how the two models differ
Hospitals participate in one model or the other, never both at the same time. TEAM participants are excluded from CJR-X for the duration of TEAM; when TEAM ends, eligible former TEAM hospitals automatically transition into CJR-X.
| Dimensions | TEAM | CJR-X (Proposed) |
|---|---|---|
| Start date | January 1, 2026 | October 1, 2027 |
| Geographic scope | Selected core-based statistical areas (CBSAs; ~25% of markets) | Nationwide (except Maryland and TEAM CBSAs) |
| Episodes covered | 5 surgical categories (LEJR, SHFFT, FUSION, CABG, BOWEL) | LEJR only |
| Episode length | 30 days post-discharge | 90 days post-discharge |
| Cost basis | Standardized dollars | Wage factor-adjusted standardized dollars |
| Discount factor | Fixed 1.5% for CABG and BOWEL, and 2% for LEJR, SHFFT, and FUSION | 2% baseline (reducible to 0% via quality) |
| CQS impact | Percentage adjustment up to 10% or 15% depending on participation track. No threshold to receive payment | Point system aligned with reducing discount factor. Minimum threshold necessary to receive payment |
| Risk adjustment | Hospital + beneficiary multipliers | Same methodology as TEAM |
| Duration | 5 years (2026-2030) | Ongoing |
The 90-day window is the most consequential difference. CJR-X exposes hospitals to three times the post-anchor spending horizon of TEAM, meaning more opportunity to capture savings through post-acute care redesign, and more risk from unrelated downstream events.
Why preparation matters now
CJR-X would reach every eligible acute care hospital in the country, including many rural and safety net hospitals that opted out of voluntary models like BPCI Advanced. The October 2027 start date gives you roughly 18 months to prepare. That sounds like a long runway. It isn’t.
Risks of waiting:
- Entering year one without a baseline understanding of your own episode performance
- Under-investing in post-acute partnerships that drive 40%+ of episode spending
- Discovering CMS’s regional benchmarks places you behind peers, with no time to close that gap
Benefits of early preparation:
- Model your projected reconciliation amount before downside risk begins
- Identify the highest-cost phases of your 90-day episodes
- Negotiate gainsharing terms with surgeons and post-acute partners on your timeline, not CMS’s
- Build the quality measures tracking infrastructure required for a competitive CQS
Milliman MedInsight Bundles can help you get ahead of October 2027.
How Milliman MedInsight Bundles helps
MedInsight Bundles is purpose-built for episode-based payment programs (including CJR-X, TEAM, and EOM), translating raw CMS claims into the analytics you need to compete on a regional benchmark.
Our solution provides:
- 90-day episode construction aligned to CJR-X’s proposed LEJR definitions
- Regional benchmark comparisons across the 36 CJR-X Census Division benchmark prices
- Composite Quality Score tracking for all proposed CJR-X measures (inpatient and outpatient) with available data
- Risk-adjusted reconciliation modeling using the same logic CMS will apply
- Post-acute utilization and episode cost comparisons by operating physician
- Post-acute care drill-downs for SNF, home health, readmissions, and outpatient physical therapy
- Post-episode spending monitoring to flag exposure to the 30-day outlier rule
Why Milliman MedInsight:
- Built directly on CMS episode payment methodology
- Over a decade of bundled payment reporting experience across CJR, BPCI, BPCI Advanced, OCM, EOM, and TEAM
- Led by a team with nearly 20 years of combined CMS episode-based payment model experience
- Trusted benchmarks from Milliman’s actuarial heritage
- User-friendly, easy-to-use dashboards that surface opportunities quickly
- Data confidence through greater alignment, adoption, and accelerated efficiencies and insights
Strategic importance of the CJR-X Model
CJR-X represents the largest proposed mandatory expansion of episode-based payment in Medicare’s history. It signals CMS’s commitment to bundled payments as a permanent feature of the Medicare landscape, not a time-limited demonstration.
Hospitals that build episode analytics capabilities for CJR-X position themselves to:
- Adapt quickly when additional episode categories are nationalized
- Apply the same infrastructure to commercial bundled contracts
- Compete on value rather than volume as CMS marches toward its vision of universal accountable care
Resource hub
Explore our expert insights to accelerate your CJR-X readiness:
Milliman’s analysis of the proposed CJR-X Model and what it means for hospitals.
View the white paper →
How MedInsight Bundles supports episode-based payment programs like CJR-X.
View the brochure → Explore the related TEAM Model and how it compares to CJR-X.
View the TEAM Model → Read the official FY 2027 IPPS proposed rule published April 14, 2026.
View the rule →