For years, the smartest move in spine and orthopedic economics was to keep payers at arm’s length: negotiate the fee schedule, fight the denials and treat the insurer as an adversary to be managed. That instinct is now becoming a liability.
The surgeons pulling ahead are the ones doing the opposite. They are signing direct contracts with payers and employers, taking on risk they used to refuse, and in some cases, earning more than they ever did under fee-for-service. The gap between those groups and everyone else is widening, and a wave of mandatory Medicare risk arriving over the next several years will decide who is ready and who gets terms dictated to them.
The pressure making this urgent is not subtle. On Jan. 1, CMS launched its Wasteful and Inappropriate Service Reduction model, or WISeR, which for the first time brings prior authorization to a set of fee-for-service Medicare procedures using AI and machine-learning vendors to screen requests.
The model runs through 2031 in six states, New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington, and its target list reads like a spine surgeon’s schedule: cervical fusion, epidural steroid injections and image-guided lumbar decompression among them. Prior authorization, long a commercial-payer burden, is now embedded in traditional Medicare.
The math on partnership has flipped
The clearest evidence that the old posture is outdated comes from surgeons who changed it. At Charlotte, N.C.-based OrthoCarolina, hip and knee surgeon Brian Curtin, MD, has spent 14 years building a bundled-payment program, and he now frames it in terms that would have sounded heretical a decade ago.
“I make more now on a joint in a bundle program than I ever did on fee for service,” Dr. Curtin told Becker’s.
The numbers behind that claim are substantial. OrthoCarolina’s program started with roughly 80 bundled patients in its first year and is on track for more than 2,000 in 2026. Over that span, the overhead to run it fell from 20% to 30% of revenue to less than 10%, while revenue grew roughly tenfold.
What changed the economics, Dr. Curtin said, was cutting out the middleman. Early federal bundles left hospitals in control of the episode and much of the savings, leaving surgeons to change how they practiced while someone else kept the margin. Direct-to-employer and direct-to-payer contracting reversed that, moving the money closer to the physicians managing the care.
Data is the price of admission
The partnerships that work are not built on goodwill. They are built on proof.
OrthoCarolina’s first major direct-to-employer deal was with Duke Energy, and it followed with agreements with Blue Cross Blue Shield and the North Carolina State Health Plan, which covers about 150,000 members. The entry point each time was evidence.
“That’s how we initially got in the door with Duke Energy: We had the data to show that we could produce these results at this price,” Dr. Curtin said. “If you don’t have the data, these employers are not going to be even considering you as an option.”
That is the dividing line in the next era of musculoskeletal contracting. Large employers and payers are not buying promises; they want cost, outcomes, complications, readmissions and episode performance in writing. Groups that can show those numbers gain leverage. Groups that cannot will find risk-based contracting happening to them rather than with them.
The discipline has to start internally. Praveen Reddy, MD, a neurosurgeon who owns the Center for Minimally Invasive Neurosurgery in Houston, mapped fixed costs, implant costs and operating time across roughly 1,000 procedures before comparing them with what local hospitals are paid. The specifics matter less than the principle: know your economics before the payer, employer or hospital defines them for you.
Why spine is the harder case
Joint replacement has become the cleanest proving ground for these arrangements because the procedures are standardized and the outcomes are easy to track. Spine is not that.
“Bundled payments don’t really exist in spine surgery as of right now,” said Aqib Zehri, MD, a neurosurgeon at The Oregon Clinic in Portland. The reason is variability. A single-level decompression, a single-level fusion, a revision and a complex deformity correction are radically different episodes, and patients arrive with different ages, body-mass indexes and risk profiles.
A crude bundle could reward simple cases and punish surgeons who take on the sickest patients, pushing organizations away from the complex work only they can do.
That does not exempt spine from what is coming. It means the first spine partnerships have to be engineered with risk stratification built in, rather than borrowed wholesale from the joint-replacement playbook. The groups doing that design work now will shape the contracts; the ones waiting will inherit them.
The friction that makes the case
The alternative to partnership is the status quo, and few surgeons defend it. In a January Becker’s article featuring spine and orthopedic leaders on their top friction points, payers were the single common thread across every practice setting.
Brian Gantwerker, MD, a neurosurgeon at the Craniospinal Center of Los Angeles, described a pattern of aggressive underpayment. “What we’ve seen now is new levels of dishonesty and clawbacks from the insurers, and there’s a lot of problems right now with physicians getting paid,” he said, warning it will push more physicians out of independence and out of network.
The reimbursement math compounds the frustration. Because many commercial contracts are pegged to a percentage of Medicare, cuts to the physician fee schedule flow straight into private payment. That structural link is exactly why surgeons who can escape pure fee-for-service, through shared-savings and episode-based deals, are protecting themselves from a baseline that keeps eroding.
Partnership is not the same as capitulation
None of this means every insurer overture deserves a signature. Partnerships between physicians and payers are frequently announced as transformative yet fail to sustain alignment because of competing incentives. A payer wants to spend less; a surgeon wants to be paid fairly for complex work. A deal that ignores that tension collapses at the first wave of denials.
The arrangements that endure share a structure: a specific, mutual exchange of lower site-of-care costs for predictable volume and faster authorization, underwritten by outcomes data both sides trust. Crucially, the best of them route savings to patients too. Under OrthoCarolina’s North Carolina State Health Plan bundles, Dr. Curtin said, patients now pay nothing out of pocket. As Dr. Reddy put it, the goal has to be avoiding “a race to the bottom,” where cheaper care is mistaken for better care.
The window is closing
The reason to act now is that the voluntary phase is ending. CMS is moving hospitals into mandatory episodic risk through its Transforming Episode Accountability Model, and its January decision to graft prior authorization onto traditional Medicare through WISeR shows the direction of travel.
Ben Schwartz, MD, a senior advisor at Los Angeles-based Commons Clinic and a total joint surgeon by training, put the timing plainly: The moment to learn risk-based contracting is not after you are forced into it.
For spine leaders, the question is no longer whether payers will keep tightening. They will. The question is whether a practice has built the data, cost discipline and site-of-care strategy to negotiate from a position of strength, or simply absorb whatever reimbursement pressures come next.
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.
