At an average of $543,000 per year, orthopedic surgeons lead the physician pay scale in 2025 — but pay fell 3% year over year, signaling the specialty’s longheld lead may be beginning to recede.
A key factor is Medicare’s 2.83% physician fee schedule cut for 2025, which lowered the conversion factor from $33.29 to $32.35.
“We’re just having to fight more every day for the same dollar,” Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group told Becker’s. “It’s definitely not sustainable to continue to see Medicare force pay cuts on physicians.”
Expense pressures are adding to the squeeze. Labor and supply costs remain elevated, with supply expenses per full-time equivalent rising 82% from 2013 to 2022 in physician-owned multispecialty practices. Inflation of 3.2% year over year at the end of 2024 further limited practices’ ability to absorb reimbursement losses.
The site-of-service shift is also reshaping orthopedic economics. More joint replacements and musculoskeletal procedures are moving into outpatient and ASC settings, where Medicare typically reimburses at about 50% of hospital outpatient department rates for the same services.
“The big thing that we’re following now is if the payers go to a site-neutral payment,” Jonathan Foret, MD, of Baton Rouge (La.) Orthopaedic Clinic told Becker’s.
To offset these pressures, practices are adopting new strategies. Groups are tightening revenue cycle processes, retraining teams on coding and pursuing payer-facing approaches such as pricing transparency, bundled offerings and data-driven negotiations to reduce denials and smooth reimbursement.
Leaders warn that continued reimbursement erosion will accelerate consolidation, particularly for smaller independent groups.
“The next iteration of healthcare is that you’re not going to see very many small groups that exist anymore … because the cost of providing care and the cost of actually running a business is getting so expensive that you have to have economies of scale,” Mr. Lovewell said.
What happens next depends heavily on federal policy.
Senators have urged Congress to act to avert physician pay cuts, but the outcome remains uncertain. Without relief, orthopedic surgeons may continue to see their long-standing compensation advantage narrow, even as the specialty remains among the most highly compensated.
