Beyond the rule: 10 CJR-X questions hospitals asked and DataGen answered

During a recent HANYS webinar, hospital leaders asked DataGen's alternative payment model expert, Alyssa Dahl, vice president of advanced analytics, detailed questions about how the Comprehensive Care for Joint Replacement Expanded Model (CJR-X) works in practice.

Rather than focusing on participation requirements or implementation timelines, attendees wanted clarity on quality measures, target price calculations, post-acute care strategy and other operational details that can directly affect performance under the model. Below are the detailed answers to ten questions raised during our webinar Q&A.*

1. How are HCAHPS and OAS CAHPS used in CJR-X?

In CJR-X, the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) and the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) surveys serve as the patient satisfaction component of the Composite Quality Score (CQS). In the CQS calculation, HCAHPS results are weighted on the number of inpatient episodes, while OAS CAHPS are weighted on the number of outpatient episodes.

Patient satisfaction measures account for 40% of the CQS. Complications account for 50%, and patient-reported outcomes account for the remaining 10%.

The CQS affects participants in two important ways:

1. It determines the CMS discount factor applied in the participant's final target price calculation, ranging from 0% to 2%.
2. Hospitals must achieve a minimum CQS threshold to receive any reconciliation payment if savings are generated.

The Centers for Medicare and Medicaid Services (CMS) will use HCAHPS and OAS CAHPS in CJR-X the same way they are currently used in the Hospital Inpatient Quality Reporting (IQR) Program and the Hospital Outpatient Quality Reporting (OQR) Program, without modifications. The measures are CMS Certification Number-based, as is CJR-X participation, and will continue to include both Medicare and non-Medicare survey respondents, not limited to CJR-X episodes.

2. What impact could CJR-X have on physical therapy and rehabilitation services?

While CJR-X does not change physical therapy reimbursement directly, episode-based payment models have historically influenced where rehabilitation services are delivered.

In earlier models such as the Bundled Payments for Care Improvement (BPCI) initiative and the original Comprehensive Care for Joint Replacement Model (CJR), hospitals often reduced Medicare episode spend by shifting clinically appropriate patients from inpatient rehabilitation facilities to skilled nursing facilities and from skilled nursing facilities to home healthcare.

Many of those shifts have already occurred.

For Medicare Severity Diagnosis Related Group (MS-DRG) 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without Major Complication or Comorbidity) episodes in particular, utilization of inpatient rehabilitation and skilled nursing has declined in favor of home healthcare services over the past decade. As a result, organizations participating in new models such as the Transforming Episode Accountability Model (TEAM) are now focused on reducing reliance on home healthcare for physical therapy and transitioning low-acuity patients, when appropriate, to outpatient or office-based physical therapy services where additional Medicare episode savings can be realized.

3. Will each CJR-X episode have a different target price?

Yes, each CJR-X episode will receive its own regional target price based on both the episode type and the risk adjustments that apply to that particular patient's and hospital’s characteristics. Episode type refers to the triggering MS-DRG or Healthcare Common Procedure Coding System (HCPCS) code. CMS will treat outpatient trigger codes 27447 and 27130 the same as DRG 470, creating site-neutral target prices across inpatient and outpatient settings.

Episode risk adjustments include:

• hospital safety net status;

• hospital bed-size category;

• beneficiary economic risk;

• age group;

• disability as the reason for Medicare enrollment;

• prior post-acute care utilization;

• institutional long-term care status;

• Hierarchical Condition Category Coding (HCC) count;

• specific HCCs; and

• procedure type.

CMS models the influence of these factors separately for each episode type. As a result, the same risk-adjustment characteristic may affect one episode type differently from another.

The only way two episodes will have the same target price is if they occur within the same region, are triggered by the same episode type and have identical hospital and beneficiary risk-adjustment characteristics.

4. For the THA/TKA PRO-PM are surveys still only required for primary total hip and knee replacements?

Yes, based on the fiscal year (FY) 2027 Inpatient Prospective System (IPPS) final rule, CMS is using the existing mandatory Total Hip Arthroplasty/Total Knee Arthroplasty Patient-Reported Outcome-Based Performance Measure (THA/TKA PRO-PM) without modification. The measure applies to elective primary total hip and total knee arthroplasty procedures and excludes fractures, revisions, partial procedures and other excluded populations defined in the measure specifications.

CMS did not propose a separate patient-reported outcome submission requirement for outpatient CJR-X episodes. Instead, the existing inpatient THA/TKA measure will be used to assess quality performance across lower extremity joint replacement (LEJR) episodes regardless of setting.

An outpatient version of the measure could be added in the future when it becomes mandatory in the Hospital OQR Program, but any such change would require additional rulemaking.

5. Are ankle procedures excluded from the TTHA/TKA PRO-PM?

Yes, ankle procedures are not included in the current THA/TKA PRO-PM. The measure remains focused on inpatient elective primary THA and TKA procedures and includes a variety of existing exclusions, including fractures and revisions.

CMS acknowledged recommendations to adopt an ankle-specific patient-reported outcome measure, such as the Foot and Ankle Outcome Measure Score. However, CMS chose not to adopt additional measures at this time.

The agency noted its preference for leveraging measures hospitals are already reporting through existing CMS quality reporting programs to minimize additional reporting burden while still addressing quality across LEJR episodes.

6. What episode volume qualifies a hospital as low volume?

In CJR-X, CMS will consider a hospital having low volume LEJR if it has fewer than 31 episodes across the three-year baseline period. That is roughly equivalent to averaging about 10 qualifying episodes per year.

For Performance Year (PY) 1, CMS will assess low-volume status using calendar years 2024 through 2026 claims data. Hospitals designated as low volume for a given PY remain in the model but are excluded from the PY’s reconciliation. This means they are not eligible for upside savings and are not exposed to downside financial risk during that PY.

CMS will reassess low volume status annually as the baseline period rolls forward. As a result, a hospital could be considered low volume in one year and not in the next.

CMS will identify low-volume participants and participants with other special designations (like safety net hospital status) when participant lists are released before each PY begins.

7. How do annual wage index changes and other update factors affect target prices?

CMS will use standardized, rather than “real” dollars when calculating target prices and Medicare episode spend in the CJR-X Model. When claim payments are standardized, geographic and policy-based adjustments to provider payments are removed. This allows for costs and resources to be fairly compared when differences are measured.

In addition to using standardized dollars, numerous transformations are necessary to construct the CJR-X target price. First, when CMS creates the regional benchmark price, the agency will trend spending from the three-year historical baseline period forward to the most recent year of that baseline. The benchmark is then trended forward again when calculating preliminary target prices before the PY begins.

After the PY concludes, CMS updates the trend factor retrospectively during reconciliation to account for spending differences that occurred during the performance period. CMS has established limits on how much that trend factor can change when calculating the final target price.

One notable aspect of CJR-X is that CMS will not provide interim MS-DRG and Ambulatory Payment Classification (APC) update factors during the PY. As a result, those updates will not be reflected until reconciliation occurs. CMS has indicated that additional target-pricing specifications and technical guidance will be released.

8. What care delivery waivers are available to CJR-X participants?

CJR-X includes three waivers of Medicare program requirements that participating hospitals may use to provide greater flexibility in care delivery:

• Post-discharge home visits: This waiver allows clinicians to provide home visits following a patient's procedure to support care coordination during a clinically vulnerable period.

• Telehealth: This waiver allows providers and suppliers to use telemedicine for beneficiaries who are not classified as rural, allowing them to receive telehealth services in their home or place of residence.

• Three-day SNF rule: This waiver allows a beneficiary to be discharged to a skilled nursing facility or swing bed in fewer than three days following the anchor hospital stay or procedure, provided the receiving facility has an overall rating of three stars or higher.

These waivers are intended to give CJR-X participants additional flexibility in how they deliver and coordinate care.

9. Are LEJR procedures performed at ambulatory surgical centers excluded from CJR-X?

Yes, CJR-X applies to eligible hospitals paid under both the IPPS and Outpatient Prospective Payment System (OPPS). A LEJR procedure triggers a CJR-X episode only when an eligible hospital bills for the procedure on an inpatient or outpatient claim.

Ambulatory surgical centers are not eligible hospital participants in CJR-X. Therefore, LEJR procedures performed at an ambulatory surgical center and billed through Medicare Part B for facility services are excluded from the model.

However, this is an area worth watching. In the FY 2027 IPPS rule, CMS issued a Request for Information regarding ambulatory surgical center episodes of care and their potential future inclusion in TEAM. Any mandatory episode-based payment model for ambulatory surgical centers will need to go through formal rulemaking.

10. Do hospitals currently participating in TEAM have an adjusted timeline for CJR-X?

Yes, hospitals currently participating in TEAM are exempt from CJR-X until the TEAM demonstration ends on Dec. 31, 2030. Beginning Jan. 1, 2031, eligible hospitals that participated in TEAM will transition into CJR-X.

What these questions tell us about CJR-X

One theme emerged repeatedly throughout the HANYS discussion: Hospitals are beginning to move beyond basic questions about participation and timelines and are focusing on the operational mechanics that may ultimately influence performance.

Several questions centered on target-price methodology, risk adjustment and quality scoring. Others focused on areas where hospitals still have opportunities to influence episode spending, such as rehabilitation and post-acute care utilization. Together, they highlight how success under CJR-X may depend on understanding details that often receive less attention than the headline provisions of the model.

As CMS continues to release additional technical guidance, hospitals that understand these nuances will be better positioned to evaluate episode performance, anticipate financial implications and make informed decisions about care delivery strategies before reconciliation results arrive.

Turn CJR-X questions into actionable insights

Understanding the details behind target prices, quality measures, episode attribution and post-acute care utilization is only the first step. The next challenge is determining what those policies mean for your organization.

DataGen's CJR-XcellenceSM, CJR-X Model Analytics, solution helps hospitals analyze LEJR episodes, evaluate performance against benchmarks, identify financial opportunities and prepare for CJR-X with greater confidence.

Contact us to learn how DataGen can support your CJR-X strategy.

*Questions and answers have been slightly modified for readability and to expand upon important information.