Medicare Advantage was supposed to be a bridge to a better healthcare payment system. For orthopedic surgeons on the front lines, it increasingly feels like a bureaucratic maze.
That tension, between the promise of value-based care and the reality of administrative burden, is defining the current moment in orthopedic surgery, according to Kevin Bozic, MD, chair of surgery and perioperative care at Dell Medical School at the University of Texas at Austin.
Dr. Bozic has spent much of his career working at the intersection of clinical care, payment reform and health system design. From that vantage point, he sees MA as both a catalyst for progress and a system now straining under its own complexity.
“To the extent that Medicare Advantage was Medicare’s first foray into value-based payment models, the concept of giving clinicians the opportunity to manage risk for both outcomes and cost is a great concept,” Dr. Bozic said. “Much better for practices, for the healthcare system and for patients than a fee-for-service model.”
Why orthopedics fits value-based care
Orthopedics, he argues, is particularly well suited for value-based care. Joint replacement procedures are high-volume, highly standardized and measured largely by patient-reported outcomes, a combination that lends itself to outcome-focused reimbursement.
“We have a lot of clinical standardization. We’re used to care pathways and evidence-based practice,” he said. “And we’re very facile with patient-reported outcomes, which are the main measure of success of our interventions.”
In many ways, MA helped spark broader innovation in healthcare payment. Dr. Bozic believes many of the models now emerging from the Center for Medicare & Medicaid Innovation, including bundled payments and other risk-based arrangements, likely would not exist without it.
But the model’s operational realities have drifted far from its original intent.
“Most people, when you say Medicare Advantage, they just say bad,” Dr. Bozic said. “The real question is, ‘How did we go off the rails?’”
The prior authorization problem
For many orthopedic practices, the answer begins with prior authorization.
The administrative demands tied to MA plans, documentation requirements, audits, denials and constantly shifting policies, have grown so complex that some health systems are walking away from the program entirely. The process often creates delays that ripple through patients’ lives long before a surgery ever happens.
“You see a patient, you decide they’re indicated for a procedure, you schedule it,” Dr. Bozic said. “The patient’s family takes off work, sometimes they fly in from other parts of the country to be there. And then you find out the week before that it’s not authorized or additional documentation is required.”
Those hurdles rarely stop the surgery entirely. Most procedures eventually receive approval.
“But it might not be the first time. It might not be the second. It might not be the third,” he said. “And it leads to delays in care and frustration on the part of clinicians and patients.”
The administrative toll can be staggering. In some cases, clinicians and staff spend more time navigating approvals than performing the procedures themselves.
Adding to the complexity is a new technological arms race unfolding between providers and insurers. Both sides are increasingly deploying AI to manage the prior authorization process, sometimes in ways that escalate rather than reduce friction.
“It’s like an AI battle going on between the practices and the health plans,” Dr. Bozic said. “The practices are trying to use AI to grab everything from the chart that’s required for prior authorization, and the payers are trying to use AI to figure out which procedures they can deny. It’s actually speeding things up and making it worse.”
The limits of bundled payments
The broader debate over MA often overshadows a more fundamental shift happening in healthcare: the gradual transition away from fee-for-service payment.
In Dr. Bozic’s view, that shift remains both necessary and inevitable.
“The fee-for-service payment model drives over and inappropriate utilization,” he said. “It also leads to moral injury on the part of clinicians and burnout because it’s a hamster wheel designed to get harder and harder, where you have to run faster and faster to keep up.”
Value-based payment models, by contrast, align the incentives of clinicians and patients around outcomes rather than volume.
“When the patient gets the best health outcome, the clinicians win,” Dr. Bozic said.
Orthopedics has served as a testing ground for many of those ideas. Bundled payment programs, such as Medicare’s Bundled Payments for Care Improvement initiative, forced hospitals and surgeons to think beyond the operating room and manage the entire episode of care, from preoperative optimization through recovery.
One major result was a dramatic shift in post-acute care utilization.
Before bundled payments, joint replacement patients were frequently discharged to inpatient rehabilitation or skilled nursing facilities. As surgeons and hospitals took responsibility for total episode costs, those patterns changed.
“We realized we were relying far too much on inpatient post-acute care,” Dr. Bozic said. “Rates of admission to those facilities dropped dramatically.”
Still, bundled payment programs produced mixed results overall. While some organizations generated savings by improving efficiency, the structure of the programs also created frustration for participants.
Target prices for episodes often shifted year to year, forcing providers to continually chase new benchmarks. “That’s where the term ‘race to the bottom’ came from,” Dr. Bozic said.
More fundamentally, procedure-based bundles did little to address whether surgery itself was the right intervention.
“When you bundle at the procedure level, you get a really efficient procedure,” he said. “But it doesn’t address appropriateness.”
Dr. Bozic believes the next generation of value-based models must take a broader view, managing conditions rather than individual procedures.
“The future of value-based payment is defining the episode as the longitudinal management of the condition,” he said. “If it’s hip or knee arthritis, you should be looking at a year-long episode starting with the diagnosis and managing that condition over time.”
The challenge of moving beyond fee-for-service
That perspective is shaped in part by Dell Medical School’s unique structure. Built relatively recently, in 2013, the institution was designed around value-based care principles rather than retrofitted onto legacy fee-for-service systems.
Most health systems, Dr. Bozic said, face a much harder transition because their financial and administrative infrastructure is built around processing traditional claims.
“Health systems and payers are set up to adjudicate fee-for-service claims,” he said. “If a claim comes in under a value-based payment model, you don’t pay it the same way. That makes it harder to change the system.”
At the same time, the economic pressures surrounding fee-for-service medicine continue to intensify.
“I like to say the real race to the bottom is fee-for-service,” Dr. Bozic said. “The more efficient you get at doing things, the less you get paid.”
Reimbursement rates continue to tighten, hospital margins remain thin and looming federal budget pressures could intensify cuts to Medicare and Medicaid in the coming years. Those dynamics, he believes, will eventually force healthcare organizations to experiment more aggressively with alternative payment models.
His advice for health systems unsure where to start is simple: begin small.
“Experiment with a single payer or a large employer in your community,” Dr. Bozic said. “Get experience with value-based payment models and how to adjudicate them. Over time, you build the competencies you need to succeed in risk-based models.”
What needs to change
But for MA to fulfill its original promise, he argues, one major barrier must be addressed first.
“The biggest thing that could change is reducing the administrative burden on both patients and clinicians,” Dr. Bozic said.
That means rethinking prior authorization entirely and shifting toward tools that guide appropriate care through shared decision-making rather than bureaucratic hurdles.
“If the goal with prior authorization is to reduce inappropriate services, there are other ways to do that,” he said.
In the coming years, the stakes will only grow higher. Medicare’s long-term strategy aims to move a majority of beneficiaries into MA or similar value-oriented models by the end of the decade.
Without meaningful reform, Dr. Bozic warns, the system could face an unintended consequence: reduced access for seniors as more health systems opt out.
“We’re at a crossroads,” he said. “Either the system becomes less administratively burdensome for patients and clinicians, or we’re going to have a crisis in access to care for seniors.”
