Orthopedics is at a pivotal moment, as payment reform, rising costs and shifting care models force leaders to rethink how musculoskeletal care is delivered.
From site-neutral policy changes to expanding prior authorization and the rise of value-based care, the economic and clinical foundation of the specialty is rapidly evolving.
Here are five forces shaping what orthopedic leaders are watching in 2026:
- Orthopedic practices are facing their most challenging margin environment in more than a decade, driven by declining reimbursement and rising costs: As Medicare reimbursement continues to fall while labor, supply and administrative expenses rise, orthopedic leaders say practices are under increasing financial strain. This environment is influencing consolidation, prompting some surgeons to reconsider Medicare participation and reshaping the future of musculoskeletal care.
“Declining CMS reimbursement remains one of the most pressing challenges facing physicians nationwide and continues to accelerate consolidation across healthcare, often without proven benefits in quality or cost,” Bryan Springer, MD, chair of orthopedic surgery at Jacksonville-based Mayo Clinic Florida told Becker’s.
- Implant and supply costs are outpacing reimbursement, putting growing pressure on ASC margins: Even as outpatient volume rises, implant pricing and vendor dynamics remain major cost drivers, while Medicare reimburses ASCs at roughly half of hospital outpatient rates, a gap that is tightening margins and increasing financial strain on orthopedic providers.
“Implants and surgical supplies are the most consistently misaligned ASC expense,” Peter Bravos, MD, chief medical officer of Sacramento, Calif.-based Sutter Health’s Surgery Center Division, told Becker’s. “They often require an immediate, high-cost purchase, while payer reimbursement is delayed and frequently reduced, bundled or denied.
- Site-neutral payment and outpatient migration are threatening hospital orthopedic revenue: As CMS moves to equalize payments and shifts hundreds of musculoskeletal procedures to outpatient settings, hospitals face declining reimbursement and volume for orthopedic services. Leaders say the loss of higher-paying inpatient cases, combined with narrowing site-of-service payment differences, will put increasing pressure on hospital margins and reshape how systems approach orthopedic strategy and partnerships.
“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 San Antonio-based Texas Spine Care Center, told Becker’s.
- Prior authorization is expanding into traditional Medicare through CMS’ WISeR model: Beginning Jan. 1, 2026, CMS is requiring prior authorization for select spine and orthopedic procedures under a new model targeting services vulnerable to fraud, waste and inappropriate use. The program is testing expedited authorization using AI and machine learning, applies to 17 procedures including spinal fusion and epidural injections, and is rolling out in five states without changing Medicare coverage or payment rules.
“The growing challenges associated with preauthorization for elective procedures in orthopedics will directly impact access to procedures that help relieve pain and disability when surgeries are denied or delayed due to a payer’s blanket application of criteria for surgical indications,” Michael Stauff, MD, orthopedic spine surgeon and chair of the department of orthopedics and physical rehabilitation of Worcester-based UMass Chan Medical School, told Becker’s. “On the practice side, this has led to a significant increase in administrative time and burden for staff. For surgeons, the additional time associated with peer-to-peer reviews, extra charting and other requirements comes at a cost, as well.”
- Value-based care is redefining medical necessity and surgical decision-making in orthopedics: As bundled and risk-based payment models expand, surgeons are increasingly using outcomes data and patient-reported measures to determine which patients will truly benefit from surgery versus nonoperative care.
“It is about ensuring that we deliver the right treatment to the right patient at the right time, surgical or nonsurgical,” Eric Makhni, MD, a sports medicine orthopedic surgeon and senior clinical advisor for the Center for Patient Reported Outcome Measures at Detroit-based Henry Ford Health, told Becker’s.
This shift is reducing unnecessary procedures while preserving appropriate surgical volume and will be critical for groups participating in value-based care models in 2026.
At the Becker's 23rd Annual Spine, Orthopedic and Pain Management-Driven ASC + The Future of Spine Conference, taking place June 11-13 in Chicago, spine surgeons, orthopedic leaders and ASC executives will come together to explore minimally invasive techniques, ASC growth strategies and innovations shaping the future of outpatient spine care. Apply for complimentary registration now.
