For some spine surgeons, questions about Medicare are shifting from how to absorb another payment cut to whether participation still makes financial sense at all.
The pressure has been building for years as physician reimbursement falls behind practice costs. Now, Medicare is adding new payment methodologies, prior authorization and individual physician risk to the equation, while some spine surgeons have already built viable cash-pay or insurance-free practices.
Here are eight things to know:
1. Some spine surgeons have already walked away. Ara Deukmedjian, MD, opted out of Medicare around 2011 after watching reimbursement for the same procedures fall substantially over the preceding decade.
“The risk of being a Medicare in-network neurosurgeon provider far outweighed the benefits,” Dr. Deukmedjian told Becker’s. Medicare patients who continue seeing him pay a negotiated cash rate.
Vladimir Sinkov, MD, took a similar step. His Las Vegas practice dropped all health insurance contracts, including Medicare, in 2022. “We are thriving,” Dr. Sinkov said. He cautioned, however, that going insurance-free requires a market with enough patients willing and able to pay cash.
2. For some surgeons, the tipping point is no longer theoretical. Brian Gantwerker, MD, president of The Craniospinal Center of Los Angeles, said the economics eventually became impossible to ignore.
“The tipping point came when each Medicare patient became a net-net loss on each and every office visit,” he told Becker’s. The pressure extends beyond Medicare. Peter Derman, MD, who launched a private-pay spine practice in Dallas this year, said rising costs and falling insurer payments reached a point where focusing on his preferred minimally invasive procedures was no longer economically viable under the traditional model.
3. Medicare physician payment has declined 33% in inflation-adjusted terms since 2001: The decline was cited by both the American Alliance of Orthopaedic Executives and American Medical Association.
Physicians also remain the only Medicare provider category without an automatic annual inflationary payment update, while labor, technology, supplies and other practice expenses continue to rise.
Douglas Beall, MD, illustrated the gap another way. Medicare’s conversion factor was about $31 in 1992. Adjusted for inflation, he estimated it would be $71.61 today, more than twice the current rate.
“Reimbursement has largely stayed the same, while the cost to operate a practice has increased substantially,” Dr. Beall told Becker’s.
4. The 2027 proposal could deepen the squeeze: CMS’ proposed 2027 Medicare Physician Fee Schedule would lower the conversion factor 1.68% for clinicians outside qualifying alternative payment models, from $33.40 to $32.84. Qualifying APM participants would see a 1.19% reduction, to $33.17.
For surgical specialties, those headline numbers tell only part of the story. CMS estimates proposed changes to work, practice expense and malpractice relative value units would reduce orthopedic surgery payments another 7% on average, excluding the conversion-factor change. Facility-based orthopedic services would decline an estimated 8%, while neurosurgery would see an estimated 2% reduction.
The International Society for the Advancement of Spine Surgery has described CMS’ evolving payment methodology as a “structural shift away from procedural, facility-based care.”
5. Medicare is putting more financial risk directly on individual spine surgeons: Beginning Jan. 1, 2027, CMS’ mandatory Ambulatory Specialty Model will evaluate certain orthopedic surgeons, neurosurgeons and other specialists treating Medicare patients with low back pain in selected markets.
During the 2027 and 2028 performance years, the model’s risk corridor is plus or minus 9% of Medicare Part B payments, widening to 12% by the final year. The adjustment is not limited to low back pain services; it applies across a participant’s Part B payments. The corresponding payment adjustments hit two years after each performance year, beginning in 2029.
Awareness is another concern. Mike Verdon, MD, a neurosurgeon in Dayton, Ohio, said some physicians affected by the model do not realize they are participating.
“They’re just going to cut your rates for two years,” he told Becker’s.
6. Prior authorization has reached traditional Medicare: CMS’ Wasteful and Inappropriate Service Reduction model launched Jan. 1 and brought prior authorization to fee-for-service Medicare for 17 services in six states.
The list includes several staples of spine and pain care, including cervical spinal fusion, epidural steroid injections, percutaneous vertebral augmentation and image-guided lumbar decompression. The model runs through 2031.
Grant Booher, MD, a neurosurgeon in Fort Worth, Texas, warned when the program was announced that the requirements would “delay care, increase administrative burdens and worsen outcomes.”
7. The burden extends beyond what Medicare pays for a procedure: Practices also bear the cost of complying with Medicare’s payment and quality programs. Physicians spend an average of 53 hours annually on tasks tied to the Merit-based Incentive Payment System, at a cost of about $12,800 per physician, according to AAOE estimates cited by Becker’s.
For independent practices, those expenses add to an already widening gap between reimbursement and operating costs. Spine surgeons have pointed to staffing, prior authorization, appeals, documentation requirements, insurance and other overhead as costs that continue climbing even as payments stagnate or decline.
8. A mass Medicare exit has not happened, but access is the larger concern: Opting out remains uncommon. A 2023 KFF report cited by Becker’s found just 1.1% of nonpediatric physicians had opted out of Medicare. Going private-pay also depends heavily on geography, reputation, case mix and patients’ ability and willingness to pay.
“The challenges would be if you’re in an area of the country where there’s a lot of neurosurgical competition,” Dr. Deukmedjian told Becker’s, because patients may instead choose a participating physician.
The larger question is what happens if reimbursement pressure pushes more surgeons to limit Medicare access. Rachel Bratescu, MD, has warned that continued reimbursement declines could mean “fewer surgeons may choose to accept these patients” as an aging population drives greater demand for care.
For now, the greater risk may not be a wholesale departure from Medicare, but an incremental shift: practices limiting new Medicare patients, reducing financially unsustainable services, consolidating to gain scale or experimenting with hybrid and private-pay models.
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.
