The Medicare payment model for joint replacement care is back and mandatory for nearly all acute care hospitals, resurrected in the now final Hospital Inpatient Prospective System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS).
The final rule includes a pay boost for hospitals of 2.3%, which the Centers for Medicare and Medicaid Services (CMS) justifies through a projected 2027 hospital market basket percentage increase of 3.2% brought down by a 0.9% productivity adjustment. This is anticipated to increase hospital payments by $779 million for the year, driven primarily by new approvals for technology add-on payments. LTCH PPS benefits from a similar increase, with the anticipated result being a $54 million boost in 2027.
According to the CMS press release on the resurrection of the Comprehensive Care for Joint Replacement Model (CJR-X), which initially sundowned in 2024 after an eight-year demonstration period, will be the first expanded mandatory test of an episode-based payment model. Hospitals will adopt risk for Medicare expenditures related to joint replacement surgery, through hospitalization and the first 90 days of recovery after discharge.
CMS also changed the inpatient quality programs related to payments, including penalties. Hospitals that fail to meet the Inpatient Quality Reporting Program requirements will be subject to a 25% rate of reduction. Modern Healthcare reports that three new measures will be added related to advance care planing, hospital-harm related incidents and excess days in acute care for diabetes hospitalization. The agency will also withhold 2% of payments from hospitals in the Value-Based Purchasing Program which will be redistributed based on performance.
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