The strategy that helped independent spine and pain practices grow over the past decade may not be the one that keeps them financially viable in the future.
For years, many practices have turned to ASCs to strengthen their financial footing, moving procedures into facilities where physician ownership can create additional revenue opportunities. But as Medicare reconsiders how and where it pays for care, that approach is facing a new economic test.
Hemant Kalia, MD, believes the practices that adapt first will have an advantage, and those determined to preserve the old model could find themselves fighting a losing battle.
Dr. Kalia told Becker’s that maintaining current ASC reimbursement rates for all procedures is unlikely, making changes to existing business models increasingly important.
As founder and CEO of Rochester, N.Y.-based Savya Neuroscience Institute and vice president of reimbursement and regulatory affairs for the American Society of Pain & Neuroscience, Dr. Kalia sees the pressures from both sides: as a physician operating an independent practice and as an advocate involved in national reimbursement policy.
His concern extends beyond declining payment rates. He sees a broader transformation taking shape, one that could force practices to reconsider which procedures they perform, where they perform them and how they measure financial success.
The end of the old ASC playbook?
Over the past five to seven years, ASC access and ownership have been central to the business strategies of many independent spine and pain practices, Dr. Kalia said. Performing procedures in surgery centers created opportunities to participate in facility revenue and improve margins.
But he believes the next phase of outpatient care will require a more selective approach. Dr. Kalia identified approximately 38 CPT codes for spine and pain procedures he believes can be performed safely in physician offices.
He argues that practices should move appropriate lower-acuity procedures into physician offices while reserving ASCs for more complex interventions, including those that can safely transition from hospitals.
Practices that make those adjustments will be better positioned financially, he said.
The shift is not without financial obstacles. Some advanced office-based procedures require costly disposable medical devices, creating expenses that existing reimbursement may not adequately cover.
Dr. Kalia said he is working with a national coalition advocating for legislation that would allow certain high-cost device expenses to be reimbursed separately from the underlying procedure. Such a change, he believes, could make office-based innovation more financially sustainable.
The challenge extends to other procedural specialties, including urology, vascular surgery and interventional radiology, where technological advances have expanded what physicians can perform outside traditional hospital settings.
For spine and pain practices, the calculation is becoming more complicated than simply choosing the setting with the highest reimbursement. It increasingly involves matching each procedure to a clinically appropriate setting with a sustainable cost structure.
The Medicare coverage divide
Even as physicians reconsider where to deliver care, Dr. Kalia sees another challenge emerging: Patients’ access to certain treatments can depend on where they live.
Medicare Administrative Contractors establish local coverage determinations for services without applicable national coverage policies. Those decisions can differ across jurisdictions, leaving physicians and patients navigating inconsistent reimbursement rules.
Dr. Kalia pointed to restrictions on peripheral nerve procedures, including intercostal nerve blocks, as an example of how coverage decisions can limit treatment options. Some multijurisdictional Medicare coverage policies restrict certain peripheral nerve procedures, although coverage varies by procedure, indication and contractor.
“A therapy or a treatment should not be decided based on your ZIP code,” he said.
Dr. Kalia said he helped organize a petition opposing restrictive coverage policies that collected approximately 6,000 to 7,000 signatures before being submitted to federal officials.
He argues that the consequences extend beyond physicians’ reimbursement. When a treatment is excluded from coverage, patients may face the choice of paying out of pocket or forgoing a procedure their physician recommends. The concern illustrates a growing tension in interventional pain medicine: As physicians develop and adopt new techniques, coverage policies may determine how widely those treatments can reach patients.
A new kind of financial risk in 2027
The next major change will come through Medicare’s mandatory Ambulatory Specialty Model, which begins Jan. 1, 2027.
The model will evaluate selected specialists treating conditions including low back pain on measures of quality, cost, care coordination and health information technology. Performance will determine future adjustments to Medicare Part B professional payments.
Unlike traditional fee-for-service reimbursement, the model ties a portion of physicians’ compensation to how they perform against broader clinical and spending benchmarks.
For selected physicians, the first performance year begins in 2027, with corresponding payment adjustments taking effect in 2029.
Dr. Kalia believes the model deserves immediate attention from spine and pain practice leaders, particularly those accustomed to evaluating financial performance primarily through procedure volume and reimbursement.
“That’s going to be huge,” he said.
The shift comes as CMS considers additional changes to physician reimbursement under its proposed 2027 Medicare Physician Fee Schedule, adding to the uncertainty facing independent practices.
Dr. Kalia is also watching Medicare’s Wasteful and Inappropriate Service Reduction Model, which launched in six states in 2026 and uses technology-enabled prior authorization and prepayment review for selected services.
Although CMS has not announced a nationwide expansion, he believes the program could eventually reach more markets.
“I would not be surprised if it goes to the entire country,” he said.
For independent physicians, the implications go beyond another administrative requirement. Payment increasingly depends not only on what care is delivered, but also on how its necessity, cost and outcomes are documented.
The advantage of moving first
Dr. Kalia believes independent practices that adapt to Medicare’s changing priorities will be better positioned to withstand reimbursement pressures.
“If you understand those macroeconomic rationales and change your business model with it, then you can ride the waves and you can come out as a winner,” he said.
For independent spine and pain practices, the challenge is no longer simply protecting existing reimbursement rates. It is building a business model that can survive the changes ahead.
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.
