Medicare Would Take $392 Million From Hospitals, ROMTech Says AI Could Help
Starting in 2028, Medicare will place 2,217 hospitals under mandatory two-sided financial risk for hip, knee and ankle replacements. ROMTech says its AI-assisted at-home rehabilitation could help hospitals reduce costs after discharge.
- CJR-X will affect 2,217 hospitals starting January 1, 2028.
- CMS projects a net $392 million inflow to Medicare over five years.
- More than 40 percent of episode costs arise after discharge.
- ROMTech says its AI system predicts key measures with 98.9 percent accuracy by day 10.
- PortableConnect offers supervised, at-home rehabilitation after joint replacement surgery.
Hospitals Will Have to Account for the Full Cost of Care
Medicare’s CJR-X model will launch on January 1, 2028, making participating hospitals responsible for the full cost of the 90 days following surgery. Hospitals will receive a bonus if they remain below the regional target price, but if they exceed it, they will have to repay the difference to Medicare.
Citing the final rule from the Centers for Medicare & Medicaid Services, or CMS, ROMTech says hospitals could repay $1.855 billion over five years while receiving $1.463 billion in rewards. That could amount to a net transfer of $392 million to Medicare. The company says more than half of the program’s estimated $736 million in savings will come from pricing.
Results From the Previous Program Offer a Warning
Under CJR, the predecessor to CJR-X, 60 percent of participating hospitals had to pay money back to Medicare in 2023. That was a record for the program. Of the 32 largest payers, 27 were safety-net hospitals.
According to a ROMTech statement, CJR’s elective target price fell 14.4 percent, from $24,287 to $20,794. At the same time, some healthier patients could shift to surgical centers outside CJR-X’s scope, leaving hospitals with more costly cases.
The company points out that more than 40 percent of episode-related spending occurs after discharge. Hospitals should therefore assess their costs between 2024 and 2026 against the regional average before 2028, reduce avoidable stays in rehabilitation facilities and readmissions, and protect their quality score, which determines the discount and eligibility for a bonus.
ROMTech Targets the High-Risk Period With At-Home Rehabilitation
ROMTech’s PortableConnect system provides supervised, at-home rehabilitation after joint replacement surgery. The company says the system uses more than 25 billion data points from over 12 million therapy sessions, 1,000 times more data than previous rehabilitation solutions.
The company says it predicts key outcome measures with 94 percent accuracy by day five and 98.9 percent accuracy by day 10, while readmissions could fall by as much as 88 percent. The system updates each patient’s plan based on data from every therapy session. ROMTech emphasizes that the AI makes recommendations, but the clinician makes the decision.
“The extremely dense data shows what the human eye cannot see,” said Peter Arn, CEO of ROMTech. He added that ROMTech’s AI predicts the expected outcome of recovery while there is still time to improve it.
The Financial Impact Can Also Be Quantified for Hospitals
According to ROMTech’s example, a hospital handling 300 cases a year, with a target price of $20,794, would face costs of approximately $312,000 if it exceeded the limit by 5 percent. Based on the company’s average savings of $2,400 per case, the same number of cases could generate annual savings of approximately $720,000.
In 2026, Newsweek named ROMTech one of 10 global winners of the AI Impact Health Awards. The company says its technology has been used to treat more than 200,000 patients. ROMTech is offering hospitals preparing for CJR-X a free study titled “The Economics of Recovery Under Medicare’s CJR-X Model.”
