As federal and commercial payers expand bundled and risk-based payment models, orthopedic practices are adapting to new expectations around cost, quality and care coordination.
Orthopedics has long been at the forefront of these payment shifts, particularly in joint replacement. Federal programs accelerated adoption and commercial payers have followed.
The next phase is a CMS payment model that focuses heavily on musculoskeletal care, set to launch Jan. 1, 2026, with mandatory participation for many hospitals.
“This one’s a biggie,” David Kalainov, MD, medical director of orthopedics at the Chicago-based Northwestern Memorial Hospital told Becker’s. “It is going to require integration of everybody involved in caring for an episode.”
Design details will determine whether participation is sustainable. Earlier models grew less attractive as target prices continually ratcheted down, Dr. Kalainov said.
“If you keep readjusting the target price, you’re going to disincentivize participation. It becomes a zero-sum game,” he said.
In the employed setting, Dr. Kalainov sees persistent incentive misalignment: physicians are often paid on relative value units while systems operate under value-based contracts.
“Many employed physicians still live in a world of fee-for-service, even though we’re surrounded by value-based care,” he said. “That misalignment needs to be corrected.”
Private practice groups, he added, may have clearer line-of-sight — and stronger motivation — to shared savings when they participate in bundles or clinically integrated networks. Consolidation among large orthopedic groups has created the scale needed to participate meaningfully in value-based care models and “feel it directly,” he said.
What actually drives performance under bundles?
Dr. Kalainov points to disciplined cost management, quality governance and airtight data. He emphasized the role of value analysis committees to vet implants and technology and avoid unnecessary spending.
“You have to be careful about implant selection to control costs,” he said. “You can’t just go after the latest and greatest if there’s no proven benefit over an existing technology that provides the same outcome.”
He added that documentation is equally critical in these models. “Everything is codified in medicine, and that’s how your claims are reported,” he said.
Patient-reported outcomes are part of the puzzle, but organizations also need interoperable electronic health records and the ability to capture and submit the full set of quality measures required by payers. Many small and midsize practices will need outside help to get there, he said.
“It’s so complex, you really need a third-party partner,” he said.
For practices preparing to take risk, his advice is to educate leaders, join or build a clinically integrated network, align tightly with hospital partners and standardize pathways that raise outcomes while lowering total cost.
“Maximize performance; get costs down,” he said.
Looking ahead, Dr. Kalainov expects CMS to keep musculoskeletal care in focus, with higher-acuity orthopedic episodes continuing to migrate into bundles and growing attention on procedures like shoulder arthroplasty as volumes rise. He also flagged risk adjustment as an underappreciated lever affecting fairness and spending.
The throughline, he emphasized, is alignment.
“If surgeons aren’t at the table, the incentives aren’t going to be aligned,” he said. “Everything is about getting people to work together.”
