Independent spine and orthopedic practices are considering limiting Medicare appointments as CMS weighs a payment change that one Maryland-based group estimates could cost it $9 million over the next year.
Surgeons and practice executives from health systems and independent groups discussed the financial and operational implications during a Becker’s Spine + Orthopedic Advisory Board meeting Oct. 14.
At the center of the discussion was CMS’ proposed 2027 Medicare Physician Fee Schedule, which would reduce payment by 50% for certain office visits billed with modifier 25 on the same day as a procedure with a zero-, 10- or 90-day global period.
The proposal is estimated to reduce Medicare fee-for-service payments by approximately $969 million nationally, based on 2024 spending levels. CMS is expected to finalize the rule in early November.
Here are 10 takeaways from the discussion:
1. Independent practices are nearing a breaking point. Nicholas Grosso, MD, president of Bethesda, Md.-based Centers for Advanced Orthopaedics, which has about 180 physicians, pointed to mounting financial pressures on independent practices. Since 2001, practice costs have risen 59% while Medicare physician reimbursement has declined 33% after adjusting for practice-cost inflation, according to American Medical Association data.
He estimated the proposed modifier 25 change alone could cost the organization approximately $9 million over the next year.
“This may be the death knell of a lot of private practices around the country,” Dr. Grosso said.
He emphasized the financial divide between independent practices and health systems. While hospitals can manage reimbursement changes across service lines and annual budgets, private groups must cover payroll, rent and other expenses every month.
“There’s going to be a point where you just can’t absorb the losses anymore,” he said.
2. Medicare patients could face longer waits. Dr. Grosso said independent practices may have to gradually reduce Medicare appointment availability and replace those visits with commercially insured patients. He described a scenario in which a surgeon with 60 weekly appointment slots reduces Medicare visits from 20 to 15, then 10, while monitoring whether other patients fill the openings.
“It’s not something that we want to do, but our hand may be forced,” he said.
Clay Dorenkamp, DO, an orthopedic spine surgeon at Lansing-based Michigan Orthopedic Center, said orthopedic groups in that market are having similar discussions about whether Medicare patients may increasingly need to seek care through hospital systems.
Dr. Grosso also described how some physicians are considering scheduling injections separately from office visits to avoid the proposed payment reduction. That could mean requiring patients to return for a physician assistant-run injection clinic rather than receiving both services during one appointment.
The approach could preserve reimbursement but create additional visits and inconvenience for patients.
3. The RVU model is coming under scrutiny. Spine and orthopedic leaders are questioning whether traditional productivity-based compensation can remain sustainable as reimbursement declines and health systems place greater emphasis on quality and access.
P. Ronjon Paul, MD, orthopedic spine surgeon and chair of spine strategy at Evanston, Ill.-based Endeavor Health, said relative value units do not fully capture surgeons’ contributions as health systems move toward more integrated care models.
Erica Taylor, MD, an orthopedic hand and upper extremity surgeon and vice president of health equity at Durham, N.C.-based Duke Health, said compensation discussions for fiscal 2028 remain largely RVU-driven, though quality and access measures are gaining consideration.
“There’s definitely a see more, do more, same pay mentality,” she said.
Brian Cunningham, MD, an orthopedic trauma surgeon, vice chair and director of inpatient orthopedics at St. Louis Park, Minn.-based Methodist Hospital and director of ambulatory surgery at TRIA Orthopedic Center in Bloomington, Minn., said surgeons cannot indefinitely offset declining reimbursement by increasing procedural volume.
“The people that can creatively figure out how to monetize some version of value-based care will be the ones that lead,” he said.
4. Surgeon compensation may face downward pressure. As reimbursement declines, maintaining current surgeon compensation levels may become increasingly difficult.
Kevin Bozic, MD, professor and chair of the department of surgery and perioperative care at Dell Medical School at the University of Texas at Austin, pointed to the federal government’s emphasis on increasing primary care reimbursement relative to specialty care as a sign of shifting physician payment priorities.
“People are not going to make the same incomes going forward that they’re used to,” Dr. Bozic said.
He said alternative payment models generate substantially higher margins at his organization, but they still account for a relatively small share of revenue at many practices. Until those models become more widely adopted, he expects organizations to face pressure to reduce surgeon compensation rather than rely on higher patient volumes to offset reimbursement cuts.
5. Direct-to-employer contracting is gaining momentum. Independent orthopedic groups are pursuing direct relationships with employers as an alternative to traditional commercial payer contracts.
Dr. Grosso said his group is developing a direct-to-employer musculoskeletal care model and has received positive initial feedback from insurance brokers and prospective employer partners.
Leo Spector, MD, CEO of Charlotte, N.C.-based OrthoCarolina, said his organization is also expanding its direct-to-employer strategy. In June, the North Carolina State Health Plan added OrthoCarolina to its no-cost surgical program through specialty care platform Lantern.
“We’re doubling down on it,” Dr. Spector said. However, he acknowledged a challenge for independent orthopedic groups competing for employer contracts: Their services cover only a portion of employers’ healthcare needs.
“All we can offer is the orthopedics,” he said, noting that employers also need access to cardiac, cancer and other specialty care.
6. Productivity demands could undermine surgical education. Several surgeons warned that growing pressure to maximize clinical productivity could leave less time to train the next generation of physicians.
Shannon Carpenter, MD, founder and medical director of the Bone Health Clinic in Lenexa, Kan., said surgical education has already suffered as academic centers have become increasingly focused on RVU productivity.
Dr. Taylor raised similar concerns about maintaining hands-on training while meeting efficiency expectations.
“I prefer having learners really learn by seeing me do the work, by doing the work with me on actual people,” she said. “But I don’t know how sustainable that’s going to be in these new efficiency models.”
One surgeon described performing as many as six procedures across two operating rooms in a day, a pace that would be difficult to maintain while training a fellow. The concern is that compensation and productivity models increasingly reward clinical volume without fully accounting for the time required to educate future surgeons.
7. Prior authorization is adding another layer of financial pressure. Mounting insurance denials are forcing spine practices to devote more staff and resources to securing approval for procedures, adding to the financial strain of declining reimbursement.
Frank Phillips, MD, section head of minimally invasive spine surgery at Rush University Medical Center in Chicago, said prior authorization requirements are already disrupting surgical schedules and increasing administrative demands.
“Our schedules get decimated,” Dr. Phillips said.
The burden could intensify as Medicare introduces additional prior authorization requirements through CMS’ Wasteful and Inappropriate Service Reduction, or WISeR, model. The initiative launched Jan. 1 in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington, targeting services including cervical fusion, lumbar decompression and epidural steroid injections.
For practices already facing reimbursement cuts, additional administrative costs and delayed procedures could further threaten financial sustainability and patient access.
8. Practices are rethinking how patients reach surgeons. As pressure to improve efficiency grows, orthopedic leaders are reconsidering whether every patient needs the same level of specialist involvement.
Leo Kroonen, MD, chief of orthopedic surgery at Kaiser Permanente in San Diego, said patients with vastly different clinical needs often enter the system through the same consultation process. Someone with a recent ankle sprain, for example, may receive the same initial appointment as a patient with advanced arthritis who needs joint replacement.
Dr. Kroonen said his team is exploring ways to tailor consultation time and surgeon involvement to patients’ needs, though the approach has raised internal concerns about restricting access to care.
Other surgeons described relying on physician assistants and nurse practitioners to evaluate patients and refer those requiring surgical expertise. One spine surgeon said working with two advanced practice providers for more than 15 years has helped streamline referrals, reduce unnecessary consultations and preserve surgeons’ time for patients who need it most.
9. Practices are looking beyond professional fees for revenue: As physician reimbursement comes under pressure, orthopedic groups are expanding investments in ASCs, ancillary services and alternative payment arrangements.
Dr. Dorenkamp said his organization has invested heavily in ASCs and ancillary businesses to offset declining reimbursement while controlling overhead.
Scott Blumenthal, MD, orthopedic spine surgeon and co-medical director of the Center for Disc Replacement at Plano, Texas-based Texas Back Institute, described another approach.
He said artificial disc replacement procedures face denial rates of approximately 50%, prompting the practice to develop bundled self-pay arrangements with its physician-owned hospital for patients whose procedures are not covered by insurance.
The packages combine hospital, anesthesia, surgeon and other costs into a single payment arrangement.
However, Dr. Blumenthal said implant pricing remains difficult to negotiate, limiting how much the practice can reduce the overall cost.
10. Surgeons are divided on what comes next. While leaders agreed that mounting reimbursement pressure demands action, they differed on whether coordinated advocacy or new business models offer the best path forward.
Dr. Grosso said his group and other regional practices planned to run a full-page advertisement in the Oct. 18 edition of The Washington Post, urging patients to contact lawmakers about the potential impact of reimbursement cuts on access to care. He also called for greater coordination among medical specialty organizations. An AMA-led coalition has separately urged CMS to withdraw the proposed modifier 25 payment reduction.
Emeka Nwodim, MD, a spine surgeon and managing partner and vice president of the Annapolis, Md.-based Bay Area Orthopaedics & Sports Medicine Division of the Centers for Advanced Orthopaedics, and Dr. Taylor also emphasized the importance of educating patients and communities about how payment changes could affect access to care.
Dr. Cunningham, however, questioned whether advocacy could meaningfully alter the direction of federal payment policy.
“I would be shocked if we change anyone’s plan in Washington over the next three weeks,” he said.
Rather than pursuing a single industrywide response, Dr. Cunningham encouraged practices to test different approaches to financial sustainability, including direct-to-employer contracting, alternative payment models and new care delivery strategies.
“I think the power of this group is not everybody getting on the same page,” he said.
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.
