Site-neutral payment is emerging as one of the most consequential Medicare reforms for musculoskeletal care. By equalizing reimbursement across hospital outpatient departments, ASCs and physician offices, policymakers aim to reduce spending, but orthopedic leaders warn the consequences for practice economics, ASC strategy and patient access will be far-reaching.
Industry leaders say site-neutral rules could reshape orthopedics in five key ways:
1. CMS’ proposed 2026 site-neutral payment rule would significantly narrow reimbursement disparities and force closer ASC-hospital collaboration: CMS’ 2026 Hospital Outpatient Prospective Payment System rule advances a major step toward site-neutral payment, aiming to reduce the long-standing Medicare payment gap between hospitals and physician offices.
Hospitals currently receive about 60% higher Medicare payments for similar services due to facility-fee differences — a structure lawmakers say incentivizes hospital acquisition of physician practices. Leaders expect site-neutral reform to lower hospital payments, not raise ASC rates, reshaping supply chain leverage, purchasing and partnership models.
2. Payers’ expansion of site-neutral payment policies is creating both risks and opportunities for orthopedic and spine practices: Expanding site-neutral rules could upend practice economics in a myriad of ways, from placing pressure on hospital contracts and driving down hospital-based reimbursement to creating opportunities for ASCs as payments equalize across sites of service.
Some spine surgeons warn that the transition could strain employed physicians and create regulatory challenges around non-competes, certificate-of-need laws and limitations on physician-owned hospitals, while others note that aligned payments could accelerate case migration to ASCs.
“Enacting site-neutral payments has the potential to completely upend orthopedic practices… many employed physicians may see a dramatic decline in revenue during the transition,” Adam Bruggeman, MD, spine surgeon and CEO at Texas Spine Care Center (San Antonio), told Becker’s.
3. Continued reimbursement cuts and policy shifts are expected to drive consolidation, reshape ASC strategy and pressure orthopedic demand in 2026: The biggest challenges ahead include ongoing reimbursement cuts, expanding prior authorization requirements, rising implant costs, shifting consumer expectations and the growth of bundled and episode-based payments.
Surgeons warn that declining reimbursement will continue to push practices toward mergers, employment models or ASC ownership, while broader economic uncertainty may reduce patient demand for elective procedures.
“Being a surgeon is the only deflationary profession in the world these days. Continued cuts to reimbursement will have the greatest impact on orthopedics, driving practices to sell or merge into larger entities,” Brian Blackwood, MD, orthopedic surgeon at Boulder (Colo.) Centre, for Orthopedics & Spine told Becker’s.
4. CMS’ 2026 outpatient rule will remove 285 musculoskeletal procedures from the inpatient-only list: CMS’ finalized 2026 rule removes 285 procedures — mostly musculoskeletal — from the inpatient-only list and adds 289 procedures to the ASC covered list, opening a significant new tranche of orthopedic surgeries to outpatient settings.
For orthopedic practices and ASCs, this shift accelerates the movement of joint, spine and sports procedures into lower-cost environments and pressures hospitals that rely on inpatient orthopedic volume. The rule also boosts transparency requirements and raises outpatient rates by 2.6%, adding new administrative expectations for hospitals as MSK care increasingly shifts outside the hospital.
5. Site-neutral payment expansion accelerates ASC spine volume and raises the stakes for specialty-focused revenue cycle management: The removal of site-neutral payment policies relieves long-standing financial disincentives that kept certain spine cases in hospitals and is, in turn, driving rapid migration of procedures into ASCs.
As overhead rises and payments decline, independent spine and neurosurgery groups are also relying more heavily on specialized revenue cycle management to maintain margins, manage payer policies and scale efficiently.
