The math is changing in orthopedics. Proposed CMS cuts of up to 20% on certain procedures are accelerating a calculation practice groups have been running for years — professional fees alone can no longer sustain the business.
What has emerged in 2026 is a fragmented acquisition landscape, with health systems, physician-led platforms and PE competing for facility ownership.
1. A nonprofit health system picked up an orthopedic and spine group: Sioux Falls, S.D.-based Avera Health acquired The Center for Neurosciences, Orthopaedics & Spine, a physician-owned group in Dakota Dunes, S.D. The deal adds more than 100 clinical staff across nine specialties, including physicians, advanced practice providers, physical therapists, occupational therapists and athletic trainers.
2. A health system bought a standalone orthopedic practice outright: Vero Beach, Fla.-based Cleveland Clinic Indian River Hospital acquired Orthopaedic Center of Vero Beach, expanding access to orthopedic, spine and physical therapy services.
3. A regional orthopedic group joined a health system: Gastonia, N.C.-based Carolina Orthopaedic & Sports Medicine Center joined CaroMont Health in June. A new entity, CaroMont Orthopedic & Sports Medicine Center, was established within the CaroMont Medical Group network, and all physicians at the practice became employed CaroMont providers.
4. A health system created a co-branded orthopedic institute rather than a straight buyout: Salisbury, Md.-based TidalHealth is integrating Peninsula Orthopaedic Associates into its system through a new entity, TidalHealth Peninsula Orthopaedic Institute — one of several similar hospital-orthopedic tie-ups from the first quarter of 2026.
5. A physician-led platform grew by adding members, not practices: Phoenix-based Healthcare Outcomes Performance Company added more than 845,000 new members to its musculoskeletal population health program in July, deploying it across Indiana, Kentucky, Ohio, Oregon and Virginia, with Missouri and Colorado planned for 2027.
The move reflects a different growth model than outright practice acquisition, as HOPCo is expanding its value-based care infrastructure, data platform and provider network.
6. Orthopedic leaders are passing on private equity more often: Executives from Northeast Orthopaedic Alliance, Athens Orthopedic Clinic and The Centers for Advanced Orthopaedics said larger, more sophisticated groups increasingly have other options.
Orthopedic groups are finding they can finance growth through internal cash flow or bank debt rather than private equity. Nicholas Grosso, MD, president of The Centers for Advanced Orthopaedics, likened PE money to “a payday loan” against future earnings. The sentiment marks a shift from the platform-building rush of 2017 to 2021.
7. Some physician groups are still embracing PE-backed capital, not fleeing it: Shobhit Minhas, MD, a physician partner at Fox Valley Orthopedics in Geneva, Ill., wrote that his group concluded independence was no longer sustainable on its own and partnered with Sequel Ortho, a PE-backed management services organization, to fund ASC expansion while retaining physician governance over clinical and capital decisions.
8. Federal scrutiny of PE-backed orthopedic roll-ups is intensifying: According to an analysis from Vertebral Columns, private equity activity in orthopedics has shifted since 2022 toward secondary recapitalizations and bolt-on acquisitions rather than new platform formation, partly in response to heightened oversight.
9. Reimbursement changes are pushing the market toward facility ownership:
CMS’ proposed CY 2027 physician fee schedule, released July 14, cuts the physician conversion factor by 1.68% — but orthopedic surgery faces an additional 7% exposure beyond that figure, with hip and knee replacements potentially subject to cuts of up to 20% under the rule’s methodology changes.
The changes reward ownership of facilities over professional fees — the asset most orthopedic platforms, whether health-system-owned, physician-led or PE-backed, are racing to assemble.
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.