CMS backed away from several controversial proposals in its 2027 Medicare Physician Fee Schedule final rule, but orthopedic and spine surgeons are still facing mounting reimbursement pressures, new financial risks and a fundamental shift in how Medicare pays for musculoskeletal care.
For Michael Suk, MD, an orthopedic trauma surgeon and CEO of physician career advisory firm MDEnvoy, the final rule represents a partial victory that leaves broader payment challenges unresolved.
“Medicare has spent two decades paying surgeons less for getting better at surgery, and this rule softens the 2027 cut without changing that logic,” Dr. Suk told Becker’s.
In an email interview, Dr. Suk discussed what CMS got right, where the rule falls short and why surgeons should pay closer attention to value-based care and their employment contracts heading into 2027.
Editor’s note: Responses have been lightly edited for clarity and length. Dr. Suk is also a diplomate of the American Board of Lifestyle Medicine. His views are his own and do not represent the American Medical Association or The Joint Commission.
Question: What did CMS get right in the 2027 Medicare Physician Fee Schedule final rule, particularly for orthopedic and spine surgeons?
Dr. Michael Suk: CMS listened, and it moved. The July proposal would have cut the work value of hip, knee and shoulder replacement well below what the RVS Update Committee recommended. After more than a thousand comments from orthopedic and spine surgeons, practices and societies, along with pressure from members of Congress, CMS finalized those procedures at the committee’s values instead.
CMS also scaled back its same-day visit policy. The cut now applies only to minor procedures with a zero-day global period, the lower-valued service loses 20% instead of 50%, and visits by a physician of a different specialty in the same group are untouched. That protects the visit where a surgeon examines a patient and decides whether to operate, which is often the most important judgment in the whole course of care.
CMS also did something most surgeons will overlook. It created payment for shared medical appointments, with G0686 covering the first hour of a group visit and G0687 each additional 30 minutes, and it set national rates for health coaching codes that Medicare had left to regional contractors. Tobacco cessation counseling got a higher value too. Few orthopedic and spine surgeons will notice these codes. They should.
Q: Where does the final rule fall short in addressing reimbursement challenges facing orthopedic and spine surgeons?
MS: The conversion factor falls 2.3% for most physicians, a deeper cut than CMS proposed in July, in the same year CMS projects the cost of running a practice will rise 2.6%. Medicare physician payment had already lost about a third of its value to inflation over the past two decades.
Meanwhile, the facility side of the same operation is going up. CMS projects that Medicare payment to surgery centers for a total knee replacement will rise about 4% in 2027, and musculoskeletal procedures in surgery centers about 6 percent overall, while the surgeon’s payment for the same case goes down.
The rule also contradicts itself. CMS describes this fee schedule as a move from sick care toward prevention, and some of the most effective prevention in surgery happens before the incision. We help patients stop smoking, get their blood sugar under control and build nutrition and strength so they recover faster and avoid complications. That work is a large part of why joint replacement became faster and safer. The efficiency adjustment now treats those results as a reason to pay surgeons less.
I also read this rule as an orthopaedic trauma surgeon. The efficiency adjustment assumes operations get easier over time. An 85-year-old with a hip fracture at 2 a.m. cannot be scheduled, optimized in advance or sent to a surgery center, and patients like her are older and sicker than they were 20 years ago. Cuts designed around elective cases land on the surgeons who take emergency calls, and call coverage is already one of the hardest things for hospitals to staff.
Q: How do you expect these changes to affect orthopedic and spine surgeons in 2027, and what additional reforms are most needed?
MS: Musculoskeletal care is moving to value-based payment, and lifestyle medicine is how surgeons will succeed in it. These models pay for the whole episode: the operation, any complications or readmissions, the rehabilitation, and more and more often the decision whether to operate at all.
Most of what drives those costs is what lifestyle medicine treats. Obesity, diabetes, smoking, inactivity, poor sleep and the loss of muscle and bone raise infection and complication rates, slow recovery and push patients with back pain and arthritis toward procedures sooner. A surgeon paid on the cost and outcome of an episode cannot fix those things in the operating room. They have to be treated before and after it, and until now Medicare paid surgeons almost nothing to do that.
For spine surgeons this starts Jan. 1. That day the Ambulatory Specialty Model begins, placing orthopedic surgeons and neurosurgeons who treat low back pain in a mandatory model that can raise or lower their Medicare Part B payments by up to 9%, rising to 12% in later years, based on the total cost of each patient’s back pain episode. The model also requires them to work with primary care.
What they need to succeed in it is in this same rule. A surgeon who builds a group program for back pain patients, with structured exercise, weight management, smoking cessation and coaching, can now be paid for that program and lower episode costs at the same time.
Total joint arthroplasty follows the same logic, and CMS has already finalized a mandatory nationwide joint replacement bundle. Before surgery, a paid group program can prepare patients, and a 90-minute or two-hour session finally has codes that fit it. After surgery, the same approach works for bone health, strength and fall prevention, the care that keeps a hip fracture patient from coming back with the other hip.
Orthopedics has long treated that care as someone else’s job. Surgeons who build it into their practices, with lifestyle medicine and primary care partners, will get better outcomes and will be ready as more of their pay depends on them.
Employed surgeons face a quieter risk. Most employment agreements pay a set dollar amount per work RVU, so when CMS lowers the RVUs for an operation, the surgeon is paid less for the same work even though nothing in the contract changed.
Some employer drafts we review would also let the hospital reset the dollar rate per RVU every year on its own. That surgeon could absorb a CMS revaluation and a rate cut in the same year with no say in either.
We ask for two protections: productivity measured against a fixed year’s RVU values, and a rate that changes only by mutual agreement. Any surgeon paid on production should check their agreement for both before January.
Knowing the risk is only the start, though. Hospitals negotiate these agreements every day with experienced teams, and most surgeons sit across the table alone. They should have someone in their corner who understands the terms and can change them.
The reform Congress can make now is an annual update tied to what it actually costs to run a practice, measured by the Medicare Economic Index, which the bipartisan Patients First Act would put in place. Congress should also pause the efficiency adjustment until there is real data on surgical time and complexity.
Over the longer term, Medicare should pay the people who produce the value. Surgeons control most of what determines cost and outcome in musculoskeletal care, and if Medicare wants to reward prevention and efficiency, the surgeons who deliver them should share directly in the savings.
Q: If you could sum up the impact of the 2027 Medicare Physician Fee Schedule final rule on orthopedic and spine surgery in one statement, what would you say?
MS: Medicare has spent two decades paying surgeons less for getting better at surgery, and this rule softens the 2027 cut without changing that logic.
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