2027 IPPS proposed rule: Payment updates, expanded CJR model
CMS is weighing an expansion of the Comprehensive Care for Joint Replacement (CJR) model as well as cuts to disproportionate share hospital (DSH) payments, according to the fiscal year (FY) 2027 Inpatient Prospective Payment System (IPPS) proposed rule. The proposed rule, released April 10, details updates to payment rates, bundled payment models, quality and reporting programs, and other changes.
For FY 2027, CMS is proposing a 2.4% increase to inpatient hospital payments, a projected $1.4 billion increase compared to FY 2026. The increase includes an estimated $464 million in new technology payments. However, the agency is also proposing to cut DSH payments by $250 million.
CMS is proposing a nationwide expansion of a revised version of the CJR model. The CJR Expanded (CJR-X) model. CJR-X would be a mandatory model and would begin October 1, 2027. Procedures that would be part of the model include:
- MS-DRG 469: Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with Major Complications or Comorbidities (MCC) or Total Ankle Replacement
- MS-DRG 470: Major hip and knee joint replacement or reattachment of lower extremity without MCC
- MS-DRG 521: Hip replacement with principal diagnosis of hip fracture with MCC
- MS-DRG 522: Hip Replacement with principal diagnosis of hip fracture without MCC
- HCPCS 27447: Total knee arthroplasty
- HCPCS 27130: Total hip arthroplasty
Episode length would be 90 days. Hospitals participating in CJR-X would be responsible for spending and quality of care during an inpatient stay or hospital outpatient procedure for one of the covered MS-DRGs. CMS is proposing to use a risk adjustment methodology that it says would have less administrative burden compared to CJR and would better account for patient acuity.
Hospitals participating in the Transforming Episode Accountability Model (TEAM) would be excluded from CJR-X. See the CJR-X web page for more details and an FAQ.
CMS is proposing to make several modifications to TEAM. The proposed changes include updates to episode category triggers, target prices, and other modifications. The agency is also requesting feedback on ambulatory surgical center episodes and voluntary participation of physician-owned hospitals.
CMS is also considering changes to numerous quality and reporting programs, including the:
- Medicare Promoting Interoperability Program
- Hospital Inpatient Quality Reporting Program
- Hospital Value-Based Purchasing Program
- Hospital Readmissions Reduction Program
Comments on the proposed rule are due June 9. Revenue integrity professionals should read the proposed rule carefully, paying particular attention to provisions that may directly affect their job duties, organization, and community. Discuss the proposals you believe could be significant with colleagues in your department as well as those in other departments that may be affected. Consider submitting comments on specific proposals or responding to requests for information. For guidance on how to write an effective comment, see NAHRI’s white paper Advocacy in Action: Commenting on Proposed Rules.