On November 30, 2017 CMS issued a final rule that limited the scope of the Comprehensive Joint Replacement (CJR) Model. The final rule also cancels the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model, rescinding all previous regulations on these topics.

The CJR model was designed to test bundled payment and quality measurement for an episode of care associated with hip and knee replacements to encourage providers to improve the quality of care. This initiative was initially mandatory for most hospitals within the original sixty-seven (67) Metropolitan Statistical Areas.

The final rule issued on November 30, 2017 provides that the CJR model will only continue to be mandatory for thirty-four (34) of the original sixty-seven (67) Metropolitan Statistical Areas (MSAs), and will be voluntary for the rural and low volume hospitals within those thirty-four (34) MSAs. Furthermore, in the remaining thirty-three (33) MSAs, participation will voluntary for all hospitals.

Low volume hospitals are defined as those hospitals within one of the applicable MSAs that completed less than 20 CJR episodes over the past three years used to establish target episode prices.

Rural and low-volume hospitals within one of the mandatory MSAs, and hospitals within a voluntary MSA will have a one-time option to elect to continue participation in the CJR model, which must be issued to CMS between January 1 and January 31, 2018, with an effective date of February 1, 2018.

Comprehensive Joint Replacement Model:

As defined by CMS, a CJR episode consists of the admission of an Medicare-fee-for-service beneficiary to a hospital under the Inpatient Prospective Payment System (IPPS) and the discharge paid under MS-DRG 469 (Major joint replacement or reattachment of lower extremity with Major Complications or Comorbidities (MCC)) or 470 (Major joint replacement or reattachment of lower extremity without MCC), as well as the subsequent 90 days including hospital care, post-acute care, and physician services.

Based on historical and regional pricing data, the CJR sets target episode prices that will vary across participating hospitals in order to determine the “sweet spot” for future reimbursement. Adjustments are made with consideration to a variety of factors specific to the hospital, including the participant hospital’s average Hierarchical Condition Category (HCC) score, type of episodes initiated (MS-DRG 469 versus MS-DRG 470), variation in types of procedures, and patient-specific clinical indicators such as comorbidities.

At the end of each year, actual spending will be compared with the pre-determined CJR target price, and hospitals are additionally rewarded or required to pay back depending on performance. Performance is determined by level of quality and cost efficiency as indicated by complication rates, readmission rates, and patient experience surveys.


To determine if your hospital’s participation requirements in the CJR model have been changed and to discuss voluntary enrollment, contact us here or give us a call at 708-478-7030.