As reimbursement pressures and rising costs challenge independent orthopedic practices, surgeons are turning to direct employer contracts, bundled payments, ASC ownership and other strategies to protect margins.
Here are five approaches highlighted in recent Becker’s reporting.
1. Direct employer contracts and self-pay programs: Shobhit Minhas, MD, an orthopedic hand surgeon and partner at Geneva, Ill.-based Fox Valley Orthopedics, told Becker’s that his practice generally earns better margins from self-pay and direct employer arrangements than from conventional insurance contracts.
Fox Valley participates in Lantern’s employer-sponsored network, through which Dr. Minhas has treated patients traveling from Minnesota, Iowa, Indiana and other states. The practice also offers bundled self-pay prices for certain procedures. Dr. Minhas said an all-inclusive carpal tunnel release costs approximately $3,000, covering the surgeon, facility, anesthesia and postoperative care.
“The current model, with just seeing third-party insurance patients, is not sustainable,” he said.
2. ASC ownership: Kurtis Biggs, DO, founder of Naples, Fla.-based Joint Replacement Institute, identified surgery center ownership as an opportunity for independent orthopedic surgeons.
Dr. Biggs told Becker’s that his practice’s overhead increased from 47% to nearly 70% over five years, citing rising staffing, supply and technology expenses. He said ASC ownership allows surgeons to control implant and staffing costs while generating returns beyond professional fees.
“The ASC is the best investment that I think most of us could make,” he said. Dr. Biggs also discussed concierge programs and potentially moving away from insurance contracts as future options for independent practices.
3. Bundled payments: Charlotte, N.C.-based OrthoCarolina has expanded its bundled-payment program since launching it about 14 years ago with about 80 patients in its first year.
Brian Curtin, MD, an orthopedic surgeon at OrthoCarolina Hip and Knee Center, told Becker’s the program is on track to serve more than 2,000 patients in 2026. Over the program’s history, revenue has increased approximately tenfold, while overhead associated with administering the program has declined from roughly 20% to 30% of revenue to less than 10%.
Dr. Curtin said the group’s direct employer contracts have improved physician reimbursement for certain procedures.
“I make more now on a joint in a bundle program than I ever did on fee for service,” he said.
4. Ancillary services: Michael Gross, MD, orthopedic director of Union Middlesex Orthopedics in Woodbridge, N.J., identified physical therapy, imaging, durable medical equipment and pain management as services orthopedic groups are expanding to diversify revenue.
Dr. Gross told Becker’s that practices are also moving appropriate procedures to physician-owned ASCs and office-based settings.
He said groups are placing greater emphasis on revenue cycle performance, including prior authorization, denial rates and clean claims, while becoming more selective about payer contracts and bundled-payment arrangements.
5. Payer contract renegotiations: Ernest Braxton, MD, a partner at Vail (Colo.) Summit Orthopaedics and Neurosurgery, said practices are responding to reimbursement pressures by renegotiating individual procedure rates using updated cost data.
Dr. Braxton told Becker’s that multilevel lumbar fusions and cervical disc replacements face particular reimbursement pressure among Medicare Advantage patients.
He cited flat commercial rates, rising implant costs, prior authorization requirements and post-payment denials as contributing factors. Dr. Braxton also identified ASC ownership, ancillary services and eligible payment dispute processes as strategies practices can use to address reimbursement pressures.
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.
