Independent spine practices are being squeezed from both sides of the balance sheet.
Reimbursement is declining while labor, technology and administrative costs rise. At the same time, payers are making payment harder to secure, outpatient migration is making facility ownership more important and larger organizations are building the scale needed to absorb infrastructure costs that smaller groups must shoulder themselves.
Recent Becker’s reporting points to seven forces making independence harder to sustain:
1. Professional reimbursement is losing ground: Medicare physician payment declined 33% in inflation-adjusted terms from 2001 to 2025. CMS’ proposed 2027 Medicare Physician Fee Schedule would lower the conversion factor another 1.68% for clinicians outside qualifying alternative payment models.
For orthopedics, the potential impact goes further. CMS estimates proposed changes to work, practice expense and malpractice relative value units could reduce orthopedic surgery payments another 7% on average, excluding the conversion-factor reduction.
That widening gap is especially difficult for independent practices because they directly absorb changes in both revenue and overhead.
Derek Cantrell, CEO of Carmel, Ind.-based Goodman Campbell Brain and Spine, pointed to “declining revenues over the last 20 years versus rising costs” as one of the biggest headwinds facing the independent group.
2. Prior authorization has become its own cost center: Getting paid is no longer simply a matter of performing and billing for a service. Practices are investing in authorization specialists, appeals, peer-to-peer reviews and increasingly sophisticated revenue-cycle infrastructure.
Christopher Yeung, MD, of Phoenix-based Desert Institute for Spine Care, told Becker’s nearly every surgical case at his practice requires prior authorization and about 30% are initially denied. Depending on the payer, another 10% to 15% of charges are denied after surgery, he said.
“The friction is not clinical, it is administrative,” Dr. Yeung said.
Those costs hit independent groups directly. Vijay Yanamadala, MD, of Hartford (Conn.) HealthCare, pointed to the “hidden cost of administrative infrastructure” required to meet payer requirements, including staff handling prior authorizations, peer-to-peer reviews, appeals and documentation.
3. Everything needed to run the practice costs more: Independent surgeons do not only feel increases in clinical expenses. They are responsible for employee wages, benefits, rent, IT systems, malpractice coverage, supplies, equipment, billing and other overhead that employed physicians may never see directly.
Kurtis Biggs, DO, founder of Naples, Fla.-based Joint Replacement Institute, told Becker’s that practice overhead has risen sharply since 2020, driven by higher employee compensation and costs for supplies, equipment and IT. He said his practice’s overhead increased from 47% to nearly 70% over five years.
Douglas Beall, MD, has framed the problem through the Medicare conversion factor. It was about $31 in 1992; adjusted for inflation, he estimated it would be $71.61, compared with $33.56 when he spoke with Becker’s.
“Reimbursement has largely stayed the same,” he said, while operating costs have risen substantially.
4. Professional fees alone are becoming harder to build a business around: As physician reimbursement tightens, practices are increasingly looking to ASC ownership, imaging, physical therapy, pain management and other ancillary services to participate in more of the patient’s care episode.
That puts groups without those assets at a growing disadvantage.
John Peloza, MD, founder and owner of Peloza Spine, a physician-controlled ASC-based practice in Chesterfield, Mo., described declining physician reimbursement as “death by a thousand cuts.”
“You’ve got to have other sources of revenue streams,” he told Becker’s, pointing to facility ancillaries as the biggest opportunity.
ASC ownership is particularly important as more complex spine procedures migrate to an outpatient setting. It can give practices access to facility revenue while allowing greater control over scheduling, staffing and supply costs. Recent Becker’s reporting has also highlighted imaging, physical therapy, pain management and improved clinic throughput as increasingly important revenue sources.
5. Staying independent increasingly requires enterprise-level infrastructure: Payment models are becoming more dependent on outcomes data, cost tracking and documentation that can span an entire episode of care.
Spinal fusion entered CMS’ mandatory Transforming Episode Accountability Model in 2026 for selected hospitals, while the Ambulatory Specialty Model will begin evaluating certain individual specialists treating low back pain in 2027. Commercial payers are also putting greater emphasis on outcomes and utilization.
For spine groups, that means the ability to collect, integrate and report data is becoming part of the business infrastructure required to compete.
That burden is easier to distribute across a large organization than a small physician-owned practice. Independent groups must either build the technology, analytics and reporting capabilities themselves or find partners that can provide them.
As multipayer alignment gains momentum, outcomes tracking is becoming increasingly difficult for spine practices to treat as optional.
6. The competition has scale that independent groups do not: Health systems, private equity-backed management organizations and larger physician-led platforms are all competing for spine practices, surgeons and outpatient assets.
In 2026, Becker’s tracked health systems acquiring established regional spine groups, pain and spine platforms expanding across states and independent groups combining to preserve physician ownership. Six large orthopedic groups were actively going to market this year, more than in 2025, Dana Jacoby, president and CEO of Vector Medical Group, told Becker’s.
Scale can offer advantages beyond acquisition capital. Larger organizations can combine resources for payer contracting, data analytics, compliance, recruitment, technology and revenue-cycle management across a broader provider base.
Patrick Noud, MD, of Lansing-based Michigan Orthopedic Center, has watched most independent orthopedic groups in his market disappear over roughly two decades. He told Becker’s that hospital employment can offer guaranteed compensation, built-in referral networks and administrative support that independent groups struggle to match.
7. The people needed to remain independent are getting harder to find: Spine leaders have identified experienced OR nurses and surgical technicians, physician assistants, nurse practitioners, surgical coordinators and specialized billing staff among the most difficult roles to recruit and retain.
Ben Burch, MD, of Atlanta Spine Institute, told Becker’s that spine billing requires specialized expertise in instrumentation, biologics, multilevel fusions, prior authorization and high-dollar denials. He said long-term viability will depend on strong payer contracting, minimizing financial leakage and technology that keeps surgeons focused on clinical care rather than revenue cycle.
None of these pressures means independent spine practice is disappearing. Mr. Cantrell has pointed to physician control, entrepreneurial freedom and the ability to adapt quickly as advantages of remaining independent.
But maintaining that autonomy increasingly requires more than surgical volume. Practices need specialized staff, payer expertise, revenue-cycle infrastructure, technology and data capabilities.
The squeeze is not simply making independence more expensive. It is raising the minimum infrastructure needed to sustain it.
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.
