Spine surgery is moving out of the hospital faster than any payment system was built to handle, and the ability to prove outcomes is becoming the price of admission. As of Jan. 1, spinal fusion sits inside a mandatory Medicare bundle, and the commercial payers steering spine cases into ASCs increasingly want the data to match.
Start with the federal piece. CMS launched its Transforming Episode Accountability Model on Jan. 1, a mandatory bundled-payment model running through Dec. 31, 2030, for roughly 740 hospitals in selected regions. Spinal fusion is one of five surgical episodes it covers. Participation is not optional: Of the more than 700 hospitals in the model, only 10 joined voluntarily, according to Becker’s reporting.
Under TEAM, a hospital’s reimbursement for a spinal fusion episode is adjusted by quality performance, which can move the final reconciliation by 10% to 20%.
The risk is not evenly distributed. The model groups complex multi-level fusions and revisions under the same diagnosis-related groups as far simpler cases, so the hardest cases will consistently exceed targets, Edward DelSole, MD, of Keystone Spine & Pain Management Center in Wyomissing, Pa., told Becker’s.
The measurement tools already exist. The mandate for spine is catching up.
For now, the one patient-reported outcome measure CMS finalized inside TEAM applies to joint replacement, not spine, and spine leaders are candid that the model is still maturing.
“Bundled payments don’t really exist in spine surgery as of right now,” Aqib Zehri, MD, a neurosurgeon at the Oregon Clinic in Portland, told Becker’s, pointing to the case-mix variability that makes a single-fusion bundle hard to build. That is a reprieve, not an exemption. The groups designing risk-adjusted spine contracts now will write the terms; the ones waiting will inherit them.
The instruments tend not to be the primary obstacle. Spine has mature, validated PROM tools: the Oswestry Disability Index for lumbar disease, the Neck Disability Index for cervical cases, visual analog pain scales and the PROMIS system. A spine program not already capturing ODI or PROMIS scores before surgery and at defined post-op intervals has no baseline to show a payer, and no way to prove that a lower-cost outpatient fusion delivered an equivalent functional result.
Payers are steering spine to the cheapest setting, then holding the line on price.
The migration itself is settled. Outpatient spine volume rose about 193% from 2010 to 2021, with ASC cases growing 15.7%. CMS accelerated it further by finalizing a 573-code expansion of the ASC covered procedures list for 2026 and beginning a three-year phaseout of the inpatient-only list that long dictated where complex spine cases could be performed.
Here is the squeeze. As CMS moves spine cases to the lowest-cost site, it reimburses that site the least. The 2026 ASC conversion factor is $56.322, compared with $91.415 for hospital outpatient departments, leaving hospitals collecting roughly 60% more for comparable services. In that environment, outcomes data is the spine program’s leverage.
“Outpatient spine surgery is not inpatient care moved to a cheaper setting,” Michael Lewis, MD, chair of anesthesiology and pain management at Detroit-based Henry Ford Health, told Becker’s, arguing that payers who evaluate ASC programs through an inpatient lens miss the downstream savings.
To apply numbers to his argument, an anterior cervical discectomy and fusion runs about $5,879 in an ASC at one year, compared with $12,873 in the hospital. A center that can pair a cost figure like that with documented ODI improvement and low readmission rates has a contracting case. One that can show only the cost number is negotiating half-blind.
What it means for spine leaders
The commercial upside is real for groups that commit early. One bundled-payment program at Charlotte, N.C.-based OrthoCarolina grew from roughly 80 patients in its first year to a projected 2,000-plus in 2026. Spine surgeons increasingly frame the shift as shared accountability for outcomes, and ASC leaders expect reimbursement to be tied to measurable results rather than case count.
The near-term risk is subtler than a penalty. ASCs remain exempt from TEAM as direct participants, but a spinal fusion performed at an ASC can still land inside the total cost of a hospital’s TEAM episode when the case is steered there. A surgery center that cannot document outcomes becomes the unmeasured, expensive-looking link a hospital’s episode data flags first, and the referral volume follows the data.
Patient-reported outcomes stopped being a spine quality-registry exercise the moment fusion entered a mandatory bundle and payers began pricing the outpatient shift. For spine leaders, the open question is no longer whether to collect ODI and PROMIS scores, but whether that data will be ready when a hospital partner or a payer asks to see it.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
