This week, we get into the side of the medical device industry that most people never see until it is already affecting their territory: payment, reimbursement, and what happens when the government changes the rules.

There is a version of this industry that most people see when they are trying to break in: the OR, the surgeon relationships, the products, the cases… the glamorous world of a med device rep! That world is real, compelling, and why most of us got into med device in the first place.

But there is another layer beneath it all that took me years to fully understand, and I wish someone had explained it to me earlier. That layer is payment and reimbursement: how the products you sell actually get paid for, who makes those decisions, and what happens to your territory when those decisions change.

When I started out in orthopedics, it was the Wild West. If the surgeon wanted it, the surgeon got it, and we charged handsomely for it. Don’t get me wrong, we weren’t doing anything improper, but pricing was much more premium and far less commoditized than it is today. Over time, hospitals and Group Purchasing Organizations (GPOs) began to realize just how much power they had to influence pricing and purchasing decisions. A lot of that happened behind the scenes, at least from my perspective at the time. Looking back, it would have been incredibly helpful to understand that side of the business much earlier.

For a long time, I thought reimbursement was somebody else’s problem. Finance figured it out. Regulatory handled it. My job was to sell the product and support the case. What I eventually learned is that reimbursement is everybody’s problem, and the reps who understand it become a fundamentally different kind of commercial partner than the ones who don’t.

When a hospital tells you it can no longer use your product because the economics don’t work, that is a reimbursement conversation. When a surgeon asks whether a new technology will be covered for their patients, that is a reimbursement conversation. When a health system suddenly starts pushing back on implant costs in a way it never did before, there is often something bigger happening behind the scenes.

This week, we’re looking at two of the most significant payment and reimbursement developments affecting medtech right now. Both have the potential to influence how hospitals purchase devices, how surgeons make decisions, and how reps need to position themselves in the field.

This is a part of the industry that does not get nearly enough attention in most career conversations. It should.

Glad you're here. Let's get into it.

Andy Knapik, Founder

The Modern Med Rep

If you want to understand why hospitals say yes or no to a device, why some products gain traction quickly and others stall despite strong clinical data, and why certain territories suddenly become harder to work in despite nothing changing on your end, the answer usually comes back to reimbursement. It is the layer underneath everything in medical device that most people working in the commercial world do not fully understand until it directly affects them.

Here is a plain-language breakdown of how it works and why it matters to anyone building a career in this space.

How devices get paid for

When a hospital buys a device and uses it in a procedure, it expects to be reimbursed for that procedure by whoever is paying for the patient's care: Medicare, Medicaid, a commercial insurance plan, or the patient directly. Reimbursement rates are set by payers based on procedure codes, diagnosis codes, and the setting in which the procedure is performed. If the reimbursement rate for a procedure covers the cost of the device plus the hospital's operating margin, the hospital has an incentive to use it. If it does not, the hospital has a cost problem, and the rep selling that device is going to hear about it.

Why reimbursement affects what hospitals buy

Hospitals operate on margins that most people outside healthcare find surprisingly thin, often 2% to 4% for well-run systems. Every purchasing decision gets evaluated in the context of whether the hospital will be adequately compensated for the care it provides using that product. This is why value analysis committees exist: groups of clinicians, administrators, and finance people who evaluate whether a device's clinical benefit justifies its cost within the hospital's reimbursement environment. A rep who walks into a hospital understanding what procedures are reimbursed at what rates, and how their product fits into that picture, is a different conversation partner than one who just knows the clinical features.

What the RAPID pathway changes

Under the current system, FDA clearance or approval does not automatically mean Medicare will pay for a device. Coverage determinations at the national level can take years, during which a device may be cleared by the FDA but not reimbursed for Medicare patients. The proposed RAPID pathway would allow certain devices to receive national Medicare coverage within months of FDA authorization. For device companies and commercial teams, this is significant: faster coverage means faster access to the Medicare patient population, which is a major driver of procedure volume in most segments, particularly orthopedics, cardiovascular, and neurology where the Medicare population is large.

The commercial implications for reps

Reimbursement fluency is increasingly part of what separates good device reps from great ones. Hospital administrators are asking about reimbursement. Materials managers are asking about reimbursement. Surgeons whose patients are on Medicare are asking about reimbursement. The rep who can answer those questions accurately and confidently, without having to say "let me get back to you," builds a different kind of credibility than one who deflects to the managed care team every time the subject comes up.

CJR-X, short for Comprehensive Care for Joint Replacement Expanded, is a mandatory bundled payment model finalized by the Centers for Medicare and Medicaid Services (CMS) that takes effect January 1, 2028. It requires hospitals to take financial responsibility for the total cost of a hip, knee, or ankle replacement and the 90 days of recovery that follow. We are covering it here because it is the most significant policy change to hit orthopedic device sales in years, and it will change how hospitals buy implants, how surgeons make decisions, and what device reps need to know to be effective in that environment.

CJR-X is the most significant policy change in years to affect orthopedic device sales, and it officially takes effect on January 1, 2028. But the conversations it will force are already happening in hospital boardrooms, orthopedic surgery departments, and purchasing committees right now. Here is what device professionals need to understand about it.

What CJR-X actually does

Starting January 1, 2028, more than 2,500 hospitals nationwide will be required to participate in a bundled payment model covering hip, knee, and ankle replacements. Under this model, the hospital receives a single-episode payment covering the procedure, hospitalization, and the first 90 days of recovery. If the total cost of care comes in below a target price set by CMS, the hospital keeps the savings. If it comes in above, the hospital absorbs the loss. The predecessor model, which ran in 465 hospitals from 2016 to 2024, saved Medicare an estimated $112.7 million. CJR-X expands that model to more than four times as many hospitals, nationwide, with no opt-out for most acute care facilities.

What it means for how hospitals buy devices

When hospitals are financially accountable for the total cost of a 90-day episode, they look very differently at implant costs than they do in a traditional fee-for-service environment. A hip implant that costs $3,000 more than a comparable alternative does not just represent a purchasing decision. It represents a direct reduction in the hospital's potential savings under the bundle. Hospital administrators and orthopedic service line leaders will be under pressure to standardize implant selection, reduce variation in post-acute care utilization, and negotiate harder on device pricing. For reps selling orthopedic implants, the value conversation is going to change.

What it means for your conversations in the field

 The reps who will be most valuable to their hospital accounts in the CJR-X environment are the ones who understand the model and can help their customers navigate it. That means knowing which procedures are covered, how the episode window works, how implant costs affect the hospital's financial position under the bundle, and what the hospital needs to demonstrate on quality metrics to receive reconciliation payments. This is not information that most device reps carry into their accounts today. The ones who develop it will stand out.

The career opportunity in this shift 

As hospitals prepare for CJR-X, they will need device partners who can contribute to care coordination and cost management conversations, not just product support. Reps and clinical specialists who understand the bundled payment model, can speak to outcomes data, and can help hospital teams think through post-acute care coordination will be far more valuable than those who can only talk about the device itself. If orthopedics is your target segment, building fluency in CJR-X now, before January 2028, is one of the highest-leverage things you can do for your career.

The CJR-X announcement is significant enough to warrant its own plain-language explanation, separate from the career implications. Here is what bundled payments actually are and why they matter to anyone in the medical device industry.

What a bundled payment is

In traditional fee-for-service healthcare, every provider involved in a patient's care bills separately. The hospital bills for the surgery and the stay. The surgeon bills for the procedure. The physical therapist bills for rehab. The skilled nursing facility bills for post-acute care. Each bill is paid separately, with no one entity financially responsible for the total cost of the episode. If care is redundant, inefficient, or produces complications that require readmission, every provider bills again.

A bundled payment changes that structure. Under a bundle, a single entity, usually the hospital, receives one payment meant to cover all costs associated with a defined episode of care. For CJR-X, that episode runs from the joint replacement surgery through 90 days after discharge. If the total cost of everything within that episode, including the implant, the OR time, the hospitalization, the physical therapy, and any complications or readmissions, comes in below a target price, the hospital keeps the difference. If it comes in above, the hospital pays it back.

Why do these changes affect hospital behavior?

When hospitals assume the financial risk for an entire 90-day episode, every cost within that episode becomes their direct problem in a way that fee-for-service does not. The cost of the implant. The length of the hospital stay. Which skilled nursing facility does the patient go to after discharge? Whether the patient ends up back in the emergency room three weeks later. All of it affects the hospital's financial performance under the bundle. This is why hospitals in bundled payment programs tend to standardize implant selection, reduce variation in care pathways, and push for outcome data to justify the cost of higher-priced devices.

What this means in a sales conversation

A hospital administrator running a joint replacement program under CJR-X is not just asking whether your implant produces good outcomes. They are asking whether your implant yields outcomes sufficient to justify its cost within a fixed episode budget. If your device costs significantly more than a comparable alternative and you cannot demonstrate better outcomes, faster recovery, or reduced complication rates meaningfully, the math is going to be harder. This is not a new dynamic in device sales, but CJR-X makes it mandatory and nationwide, in a way that will force conversations that previously occurred only in the most cost-conscious systems.

This week's question is one of the most common things I hear from people considering this industry:

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QUOTE OF THE WEEK

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The more you know about business you are in, the more valuable you become.”

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