What CMS's New Joint Replacement Payment Model Means for Your Medical Bills

CMS changed how Medicare pays for knee and hip replacements starting in 2024

In late 2023, the Centers for Medicare & Medicaid Services (CMS) finalized a new payment model for joint replacement surgery. Beginning January 1, 2024, Medicare shifted from paying hospitals and doctors separately for each service during a knee or hip replacement to bundling those payments into one lump sum. This affects how your bills arrive, what you owe out of pocket, and which providers can participate.

The model is called the Comprehensive Care for Joint Replacement (CJR) model, and it applies to Medicare beneficiaries in 34 metropolitan areas across the United States. If you live in one of those areas and need a joint replacement, your surgery, hospital stay, physical therapy, and follow-up care for 90 days after surgery all fall under one bundled payment. That means the hospital and surgical team share one pot of money instead of billing Medicare separately for each piece.

This change affects your bills because the bundled payment model changes how much providers can charge you, when they send bills, and what happens if complications arise during your recovery period.

Key Takeaways

• CMS's bundled payment model groups all costs for knee and hip replacement—surgery, hospital stay, therapy, and 90-day follow-up—into one payment, affecting how and when you receive bills.
• The model applies only in 34 specific metropolitan areas; you can check whether your surgery location is included on the CMS website.
• Your out-of-pocket costs (deductible, coinsurance, copays) are calculated on the bundled amount, not on individual services, which may lower or raise what you owe depending on your plan.
• Hospitals and doctors must disclose the bundled price before surgery, and you have the right to ask for an itemized breakdown of what that bundle includes.
• If you need additional care within 90 days due to complications, those costs may or may not be included in the bundle depending on whether they relate directly to the joint replacement.

Which hospitals and surgeons are part of the bundled model

Not every hospital participates in the CJR model. Participation is mandatory for hospitals in the 34 designated metro areas that perform joint replacements, but some specialty centers and smaller facilities may have exemptions. Your surgeon's office or the hospital's billing department can tell you whether your planned surgery falls under the bundled model.

You can also check the CMS website directly by searching for your hospital name and the CJR model. The list includes all participating hospitals and their metro areas. If your surgery is scheduled in a participating location, the bundled payment rules apply whether you choose that hospital or not—the model is based on geography, not individual provider choice.

How the bundled payment changes what you owe

Under the old system, Medicare paid the hospital a separate amount, the surgeon a separate amount, the anesthesiologist a separate amount, and so on. Your out-of-pocket costs were calculated on each of those separate bills. Under the bundled model, CMS pays one total amount to cover all those services over 90 days, and your deductible, coinsurance, and copays are calculated on that single bundled amount.

This can work in your favor or against it, depending on your Medicare plan. If the bundled amount is lower than the sum of what individual services would have cost, your coinsurance may be lower. If the bundled amount is higher, you may owe more. The only way to know is to ask the hospital for the bundled price before surgery and compare it to what you would have owed under the old system—though hospitals rarely have that historical data readily available.

Your Part B deductible (currently $240 per year) still applies, but it applies once to the entire bundle, not to each service. If you have already met your deductible earlier in the year, you will not pay it again for the joint replacement.

What the 90-day bundled period covers and does not cover

The bundle includes the surgery itself, the hospital stay, anesthesia, imaging, lab work, and up to 90 days of follow-up care directly related to the joint replacement. That includes office visits with your surgeon, physical therapy, X-rays to check healing, and medication for pain or infection related to the surgery. If you need a second surgery within 90 days because of a complication like infection or implant failure, that is typically included in the bundle.

The bundle does not cover unrelated medical care. If you see your primary care doctor for high blood pressure during those 90 days, that visit is billed separately. If you develop a urinary tract infection after surgery, that treatment is billed separately. The key test is whether the care is directly tied to the joint replacement itself.

After 90 days, all care related to the joint replacement—including physical therapy, surgeon visits, and imaging—goes back to normal billing. Your surgeon can still see you, but those visits are billed as regular office visits, not as part of the bundle.

Your right to know the bundled price before surgery

CMS requires hospitals to disclose the bundled price to you before surgery. This is not optional. You should receive a written estimate that shows the total bundled amount and breaks down what is included: surgeon fee, hospital facility fee, anesthesia, imaging, therapy, and follow-up visits. Ask for this in writing at least a few days before your surgery date so you have time to review it and ask questions.

If the hospital does not provide a bundled price estimate, ask specifically for it by name: "I need the CJR bundled price for my joint replacement." If they say they cannot provide one, escalate to the hospital's patient advocate or billing manager. This is a requirement under the model, and you have a right to it.

The estimate should also show what your out-of-pocket costs will be based on your Medicare plan. If you have a Medigap or Medicare Advantage plan, ask your plan's customer service line how the bundled payment affects your copays and coinsurance before you sign consent forms.

What happens if you need care after the 90-day bundle ends

Once 90 days have passed since your surgery, the bundled payment period ends. Any care you need after that point—whether it is physical therapy, imaging, or a surgeon visit—is billed as a regular service under normal Medicare rules. Your deductible, coinsurance, and copays apply as they would for any other medical service.

This matters if your recovery is slower than expected or if you develop a problem months after surgery. If you need ongoing physical therapy beyond 90 days, Medicare will cover it under its normal outpatient therapy rules, which have their own limits and cost-sharing. Talk to your surgeon before the 90-day mark ends about what to expect and whether additional therapy is likely.

How to prepare for a joint replacement under the bundled model

Before your surgery, contact the hospital's billing department and ask for three things: the bundled price in writing, a list of what services are included in the bundle, and confirmation of your out-of-pocket costs based on your specific Medicare plan. Write down the name of the person you speak with and the date of the call in case you need to follow up.

If you have a Medigap or Medicare Advantage plan, call that plan's customer service line and tell them you are having a joint replacement under the CJR model. Ask how your plan handles bundled payments and whether there are any additional costs or restrictions you should know about. Some plans have specific requirements for in-network providers or prior authorization, even under the bundled model.

Keep copies of all bills and explanations of benefits (EOBs) you receive after surgery. The bundled model is still relatively new, and billing errors do happen. If you receive a bill that seems outside the bundle or if you are charged twice for the same service, contact the hospital's billing department immediately with your documentation.

Frequently Asked Questions

Does the bundled payment model apply to my joint replacement if I have Medicare Advantage?

Yes, the bundled model applies to all Medicare beneficiaries having surgery in a participating hospital, regardless of whether you have Original Medicare or Medicare Advantage. However, your out-of-pocket costs and any prior authorization requirements depend on your specific plan. Contact your Medicare Advantage plan before surgery to understand how the bundle affects your costs.

What if my surgeon is not in the participating hospital's network?

If your surgeon operates at a participating hospital, the bundled model applies to your surgery even if your surgeon is not employed by the hospital. The model is based on the hospital location, not the individual doctor. However, confirm with your surgeon's office that they participate in the CJR model at your chosen hospital.

Can I choose a hospital outside the bundled model area to avoid the bundled payment?

Yes, you can travel to a hospital outside the 34 metro areas to have your surgery, and the bundled model will not apply. However, this may mean higher travel costs, and you should confirm that your Medicare plan covers out-of-area surgery before you schedule. Most beneficiaries find it simpler to use a participating hospital in their area.

What if I develop an infection or complication after 90 days?

Complications after 90 days are billed as regular medical services under normal Medicare rules. If the complication is directly related to the joint replacement—such as a late infection of the implant—your surgeon can document that connection, but it will still be billed separately. Contact your surgeon immediately if you suspect a complication, and ask about costs before treatment begins.

Will the bundled payment model lower my out-of-pocket costs?

It depends on your plan and the bundled amount set by your hospital. Some beneficiaries pay less because the bundle is smaller than the sum of individual services would have been. Others pay more. The only way to know is to ask the hospital for the bundled price and compare it to your plan's cost-sharing rules before surgery.