Author: Penny Jefferson, MSN, RN, CCDS, CCDS-O, CCS, CDIP, CRC, CHDA, CRCR, CPHQ, ACPA-C | October 20, 2026
In June, I wrote about the proposed Comprehensive Care for Joint Replacement Expanded (CJR-X) Model and its relationship to the Transforming Episode Accountability Model (TEAM). At that time, the discussion focused on what episode-based accountability could mean for hospitals and the professionals responsible for clinical documentation, coding, medical necessity, quality, and reimbursement. Since then, the conversation has changed considerably.
On July 31, the Centers for Medicare & Medicaid Services (CMS) finalized CJR-X through the fiscal year (FY) 2027 Inpatient Prospective Payment System (IPPS) Final Rule. The model is scheduled to begin Jan. 1, 2028, and will require participation by most eligible hospitals paid under the IPPS, subject to specified exclusions. CMS has also published its participant list, giving hospitals the opportunity to determine whether they will be included and begin planning accordingly.
While implementation may be more than a year away, hospitals should recognize that preparing for CJR-X involves much more than understanding a new reimbursement methodology. The model requires an operational approach that extends across inpatient and outpatient clinical documentation integrity (CDI), coding, utilization review (UR), physician advisors, revenue cycle, finance, quality, compliance, and care coordination. The real question is whether these departments are preparing together or continuing to operate independently.
Understanding the Shift to 90-Day Accountability
CJR-X expands the original Comprehensive Care for Joint Replacement Model and moves toward nationwide participation for eligible hospitals performing qualifying lower-extremity joint replacement procedures. Unlike traditional fee-for-service reimbursement, which often focuses on the individual encounter, CJR-X holds hospitals accountable for expenditures associated with the qualifying procedure and the subsequent 90-day recovery period. The model includes eligible inpatient and hospital outpatient joint replacements, extending responsibilities beyond the traditional inpatient surgical population.
Participating hospitals will continue to receive Medicare payments through existing reimbursement systems. However, CMS will compare actual episode expenditures with established target prices and determine whether hospitals qualify for reconciliation payments or must repay. Financial performance will therefore depend not only on the initial surgical encounter but also on the services and expenditures associated with the remainder of the episode. A hospital may accurately code, bill, and receive payment for a joint replacement and still experience financial exposure because of spending after discharge.
CJR-X also differs from TEAM, which began Oct. 1, 2026. While TEAM includes several surgical categories and uses a 30-day episode, CJR-X focuses on lower-extremity joint replacements with a 90-day episode. Hospitals participating in TEAM are excluded from CJR-X during their TEAM participation. Understanding which model applies to an organization is an important first step because participation requirements, episode definitions, and performance methodologies are not interchangeable.
Why CDI and Coding Need to Move Upstream
One of the most important considerations for CDI and coding professionals is the increased emphasis on patient complexity and risk adjustment. CMS has incorporated 29 risk adjusters into CJR-X, compared with three in the original CJR Model. These include beneficiary characteristics, chronic condition burden measured through Hierarchical Condition Categories (HCCs), selected individual HCCs, prior post-acute care utilization, and hospital-level characteristics. This represents a meaningful change in how CMS accounts for differences in patient populations when establishing episode target prices.
For CDI programs, this reinforces the importance of accurate and complete clinical documentation before, during, and after the surgical encounter. Consider a patient with diabetes, chronic kidney disease, obesity, and cardiovascular disease who is scheduled for a total knee replacement. The patient’s medical complexity may influence treatment planning, anticipated recovery, and resource utilization, but the clinical record must accurately reflect that complexity. Documentation opportunities may begin with orthopedic consultation or preoperative assessment, rather than waiting until the patient is admitted for surgery.
However, expanding risk adjustment should not create pressure to increase diagnosis capture simply to improve financial performance or hospital benchmarking. Every reported diagnosis must be clinically supported, appropriately documented, and consistent with applicable coding guidelines. Hospitals must also understand which diagnoses actually contribute to the model’s risk-adjustment methodology, including the relevant data sources and lookback periods. Not every condition documented during a surgical encounter will influence CJR-X target pricing, and not every condition appearing in the medical record meets the requirements for code assignment. Documentation integrity and compliance must remain central to this work.
Including qualifying hospital outpatient joint replacement procedures also makes outpatient CDI an essential part of the discussion. Many hospitals have historically concentrated CDI resources on inpatient admissions, leaving outpatient documentation processes less developed. Under CJR-X, organizations should evaluate opportunities to strengthen preoperative and outpatient documentation, including surgical indications, relevant chronic conditions, and clinical factors influencing treatment and recovery. Outpatient coding professionals must be included in these efforts because outpatient diagnosis-reporting requirements differ from inpatient guidelines. Expanding documentation review across settings should improve accuracy and continuity without creating opportunities for unsupported diagnoses or inappropriate application of inpatient coding rules.
Medical Necessity and the Role of Utilization Review
Utilization review and physician advisors are equally important participants in CJR-X preparation, particularly because the model includes both inpatient and outpatient procedures. Participation in an episode-based payment model does not eliminate Medicare’s existing medical necessity requirements or automatically establish the appropriateness of an inpatient admission. Hospitals must continue evaluating patient status based on applicable Medicare requirements, including the Two-Midnight Rule, relevant exceptions, and other rules in effect at the time of service.
For elective joint replacements, this creates an opportunity to strengthen collaboration among orthopedic surgeons, UR, physician advisors, and CDI before surgery. Documentation should clearly outline the patient’s anticipated clinical needs, relevant risk factors, and rationale supporting the planned setting of care. The decision to admit a patient as an inpatient or provide services in an outpatient setting must remain clinically appropriate and compliant with Medicare requirements, independent of any financial incentives associated with the episode model.
Revenue Cycle, Quality, and Post-Acute Accountability
Revenue cycle and finance leaders will need to expand their perspective beyond the initial surgical claim. Traditional revenue cycle performance emphasizes coding accuracy, timely billing, denial prevention, reimbursement, and accounts receivable. Those responsibilities remain essential, but CJR-X adds financial accountability that extends through episode reconciliation. Hospitals will need to understand target-price calculations, episode attribution, reconciliation methodologies, and potential repayment exposure while evaluating the financial implications of services delivered after the initial procedure.
This requires reliable data and collaboration with analytics, quality, and clinical operations. Hospitals should begin evaluating their current joint replacement populations, including surgical volumes, 90-day episode expenditures, readmissions, complications, emergency department utilization, and post-acute care patterns. Traditional hospital revenue-cycle data may not capture the full Medicare spending associated with an episode, so CMS-provided information and appropriate data integration are especially important. An accurately coded and paid claim does not necessarily translate into favorable financial performance under CJR-X.
Quality performance is another critical consideration because CJR-X incorporates quality measures and links financial reconciliation to performance expectations. CDI and coding teams play an important role in ensuring that complications and other clinically significant conditions are accurately documented and reported. However, hospitals must distinguish expected postoperative findings from reportable complications, and avoid interpreting clinical indicators as diagnoses without appropriate provider documentation. Quality improvement and documentation integrity should support one another, without creating pressure to alter the clinical record to achieve favorable metrics.
Case management, discharge planning, and post-acute care coordination are also central to the model’s success. Rehabilitation services, medication management, follow-up appointments, communication with post-acute providers, and preventing avoidable readmissions can affect both patient recovery and episode expenditures. Hospitals should evaluate how effectively they coordinate post-discharge care while preserving patient choice and keeping clinical decisions focused on the patient’s needs.
How Hospitals Should Begin Preparing
The first step for hospital leadership is to confirm participation using the CMS CJR-X participant list and establish clear executive accountability for implementation. Organizations should identify who will coordinate the initiative and ensure that orthopedic leadership, CDI, coding, UR, physician advisors, revenue cycle, finance, quality, case management, compliance, analytics, and information technology are represented. Although each discipline has distinct responsibilities, the model requires shared oversight and a coordinated approach to improving episode performance.
Once governance is established, hospitals should conduct a baseline assessment of their qualifying joint replacement population. This should include inpatient and outpatient procedure volumes, documentation and coding accuracy, medical-necessity and patient-status processes, readmission and complication patterns, post-acute utilization, and available episode expenditure data. Identifying gaps early will allow organizations to prioritize education, workflow improvements, and data infrastructure needs before the model begins.
Hospitals should also consider developing a shared performance dashboard that connects documentation integrity, coding accuracy, medical necessity, clinical outcomes, care transitions, and financial performance. Instead of maintaining separate departmental reports that show only part of the picture, an interdisciplinary dashboard can help leadership understand how different processes affect the overall episode. These activities are recommended operational strategies, not additional CMS-mandated requirements, but they offer a practical foundation for implementation readiness.
My Perspective: Bundled Payment Requires Bundled Responsibility
What concerns me most about CJR-X is not the concept of bundled payment. Hospitals have been discussing value-based reimbursement and episode accountability for years. My concern is whether we are bringing the right people into the conversation early enough, and whether our organizations are prepared to connect work that has traditionally occurred in separate departments.
If finance studies target prices, CDI reviews inpatient diagnoses, outpatient coding works independently, UR focuses on admission status, and case management evaluates discharge needs, all without a shared strategy, we will miss the opportunity to understand the complete patient episode. Documentation supports the clinical story, coding translates that documentation into standardized data, UR and physician advisors support medical necessity and appropriate patient status, quality evaluates outcomes, case management coordinates recovery, and revenue cycle and finance evaluate financial performance. Each discipline contributes something essential, but none can manage the entire episode on its own.
In my previous discussion of TEAM and CJR-X, I emphasized that episode accountability is more than bundled payment. It is bundled responsibility. Now that CJR-X is finalized, that responsibility needs to become operational through meaningful collaboration, accurate data, compliant documentation practices, and a shared understanding of performance.
January 2028 may seem distant, but establishing baseline data, evaluating workflows, strengthening interdisciplinary relationships, and developing reliable reporting processes takes time. Hospitals should not wait until the first performance year to identify gaps that may affect clinical and financial outcomes.
Hospital leadership no longer needs to ask whether this model is coming. The question is whether the professionals responsible for documentation, coding, medical necessity, quality, care coordination, and reimbursement are already working together to prepare for it. CDI needs to be part of that conversation from the beginning, not brought in only after financial or quality results raise concerns.
References
- Centers for Medicare & Medicaid Services. CJR-X (Comprehensive Care for Joint Replacement Expanded) Model. Updated October 6, 2026.
https://www.cms.gov/priorities/innovation/innovation-models/cjr-x - Centers for Medicare & Medicaid Services. CMS Announces Nationwide Expansion of Proven Joint Replacement Program. July 31, 2026.
https://www.cms.gov/newsroom/press-releases/cms-news-cms-announces-nationwide-expansion-proven-joint-replacement-program - Centers for Medicare & Medicaid Services. FY 2027 Hospital Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System Final Rule (CMS-1849-F). 2026.
https://www.federalregister.gov/d/2026-15833 - Centers for Medicare & Medicaid Services. Comprehensive Care for Joint Replacement Model.
https://www.cms.gov/priorities/innovation/innovation-models/cjr - Centers for Medicare & Medicaid Services. FY 2027 IPPS and LTCH PPS Final Rule Fact Sheet. July 31, 2026.
https://www.cms.gov/newsroom/fact-sheets/fy-2027-hospital-inpatient-prospective-payment-system-long-term-care-hospital-prospective-payment
This article was originally published on RACmonitor.
