The Centers for Medicare & Medicaid Services has put forward two significant proposals aimed at reshaping how hospitals are paid and how patients experience major joint replacement surgeries. The first is the FY 2027 Hospital Inpatient Prospective Payment System proposed rule, which would update the framework governing Medicare payments to acute-care hospitals and long-term care facilities. The second targets hip, knee, and ankle replacements specifically, seeking to improve care quality while reducing out-of-pocket costs for Medicare beneficiaries.
The joint replacement proposal reflects CMS's ongoing push to shift toward value-based care models, where providers are rewarded for better patient outcomes rather than the volume of procedures performed. By expanding bundled payment programs for these common surgeries, the agency hopes to create financial incentives for hospitals and surgeons to coordinate care more effectively across the entire episode — from pre-surgical planning through post-operative recovery.
Joint replacements are among the most frequently performed inpatient procedures for Medicare patients, making them a prime target for cost containment. Medicare beneficiaries currently face significant variation in both the price and quality of these surgeries depending on where they receive care.
Together, the two proposals signal the agency's intent to simultaneously update baseline hospital reimbursement and drive more targeted reforms in high-volume procedure categories. Public comment periods for both proposed rules are expected in the coming weeks.