The reimbursement system for orthopedics is overdue for a rework, according to surgeons calling for greater transparency from payers and faster adoption of value-based care models. Medicare reimbursement for physicians has fallen 33% when adjusted for inflation since 2001, according to data from the American Medical Association.
Louis Levitt, MD, vice president of The Centers for Advanced Orthopaedics in Bethesda, Md., says the fix starts at the foundation: tie physician payment to the actual cost of delivering care, or risk losing the independent practices that give patients access.
Leo Spector, MD, CEO of OrthoCarolina in Charlotte, N.C., says restructuring how payment flows matters as much as the rate — his organization’s bundled payment model already gives 750,000 North Carolinians access to orthopedic surgery at no out-of-pocket cost.
Ask Orthopedic Surgeons is a series of questions posed to orthopedic surgeons and leaders around the country about clinical, business and policy issues affecting orthopedic care. Becker’s invites all orthopedic surgeons and specialists to respond.
Next question: What is one assumption about patient behavior or compliance that you’ve had to revise based on experience?
Please send responses to Cameron Cortigiano at ccortigiano@beckershealthcare.com by 5 p.m. Central time Sept. 28.
Note: Responses were lightly edited for clarity and length.
Question: If you could change one thing about how orthopedic care is reimbursed in the U.S., what would it be and why?
Louis Levitt, MD. Vice President of The Centers for Advanced Orthopaedics (Bethesda, Md.): If I could change one thing about how orthopedic care is reimbursed in the U.S., it would be to tie physician reimbursement to inflation and the actual cost of providing care. Over the past 25 years, the cost of living has roughly doubled, yet Medicare physician payment has remained essentially flat. According to the American Medical Association, physician practice costs rose 59% between 2001 and 2025, while inflation-adjusted Medicare physician payment fell by 33%. Because Medicare sets the benchmark, commercial insurers generally follow suit.
The consequences are significant. After 13 to 15 years of training and often substantial educational debt, many young physicians opt for the perceived security of employment rather than taking on the risks and responsibilities of building an independent practice. The result is fewer independent practices, fewer choices for patients and reduced access to care.
We also need greater transparency and accountability in how healthcare dollars are spent across the system. As insurers continue to report billions in annual profits, physicians who provide front-line patient care have seen Medicare reimbursement decline in real terms, making it increasingly difficult for independent practices to remain viable.
Reimbursement that keeps pace with the cost of delivering care isn’t about benefiting physicians — it’s about ensuring practices can hire staff, invest in technology, remain independent and continue providing high-quality, patient-centered care.
Leo Spector, MD. Orthopedic Spine Surgeon and CEO of OrthoCarolina (Charlotte, N.C.): I would like to see stronger alignment of incentives. Reimbursement should reward care that is both high quality and lower cost. Accelerating payer adoption of bundled payments is one practical way to get there, because the infrastructure already exists and the incentives are well aligned. Our team at OrthoCarolina has spent more than 15 years building toward this model through standardized care pathways, internal cost analytics, care navigation and a culture willing to take on financial risk for outcomes. The frustration is that the traditional payer system has not evolved at the same pace.
Orthopedics is especially well-suited for value-based contracting. Many procedures follow predictable clinical pathways, outcomes can be measured and episodes of care can be priced. When the model works, everyone benefits: patients avoid out-of-pocket costs, employers gain predictable pricing and providers are rewarded for efficiency and outcomes rather than volume alone.
We have seen this model work. Our partnership with the North Carolina State Health Plan through Lantern is a real-world example. More than 750,000 teachers, state employees, retirees and dependents now have access to all OrthoCarolina surgical procedures at no cost to them. That is what alignment among providers, employers and health plans can look like when the focus is quality, affordability and outcomes. As we noted when the partnership was announced, this reflects the broader shift toward value-based care that we have been investing in for years. The question is no longer whether bundled payments work in orthopedics. They do. The question is whether payers will move quickly enough to make them the rule rather than the exception.
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.
