Musculoskeletal care is facing a growing paradox: as demand rises and more procedures move into outpatient settings, it’s becoming harder, not easier, to get patients treated.
A new wave of payer policies, from algorithm-driven prior authorization to reimbursement cuts and site-of-care shifts, is introducing friction at nearly every step of the care pathway. The impact goes beyond administrative burden, reshaping where care is delivered, how practices operate and whether patients can access timely treatment at all.
Together, these pressures are redefining the economics and delivery of musculoskeletal care, with implications for growth, access and long-term sustainability.
1. Rigid prior authorization and algorithm-driven coverage rules are overriding clinical judgment: Orthopedic and spine leaders say the biggest friction point in musculoskeletal care stems from prior authorization delays and rigid coverage policies that fail to account for clinical nuance.
Surgeons describe a system increasingly driven by standardized checklists, AI screening and non-specialist reviewers, where approvals can hinge on specific wording rather than a patient’s actual condition. Even well-documented, medically necessary procedures can be delayed for weeks or months, or denied outright, despite meeting clinical criteria.
Leaders say these barriers not only delay care, but can worsen outcomes, prolong pain and, in some cases, force patients toward less appropriate or more invasive treatments.
2. Declining Medicare payment rates are reshaping the financial foundation of musculoskeletal care: Sustained reimbursement cuts, particularly the 2.83% reduction to the 2025 physician fee schedule conversion factor, are colliding with rising labor and supply costs to create a structurally challenging margin environment.
As reimbursement fails to keep pace with inflation, surgeons and practice leaders warn that maintaining financial viability is becoming increasingly difficult, especially for independent and rural groups.
These pressures are not only compressing margins, but also driving broader shifts across the industry, including increased consolidation, reevaluation of Medicare participation and growing concerns about long-term patient access to musculoskeletal care.
3. Site-neutral payment is poised to disrupt where — and how — musculoskeletal care is delivered: Site-neutral payment policies are emerging as one of the most consequential shifts in orthopedic reimbursement, with the potential to fundamentally reshape care delivery and practice economics.
By narrowing the long-standing payment gap between hospital outpatient departments, ASCs and physician offices, policymakers aim to reduce costs, but leaders expect the change to lower hospital reimbursement rather than raise ASC rates, altering partnership dynamics and financial incentives across settings.
The transition could pressure hospital-based contracts, disrupt employed physician models and accelerate the migration of orthopedic and spine procedures into ASCs, while also introducing new regulatory and operational challenges during the shift.
4. New CMS models are expanding prior authorization into spine and orthopedic procedures: CMS is introducing new layers of utilization management through its Wasteful and Inappropriate Service Reduction model, which requires prior authorization for select spine and orthopedic procedures in traditional Medicare.
The model, which launched in 2026 and will run through 2031, applies to 17 services, including cervical spinal fusion, epidural steroid injections, vertebral augmentation and image-guided lumbar decompression, procedures CMS has identified as vulnerable to overuse.
CMS is also partnering with AI and machine learning companies to support the review process, signaling a broader shift toward technology-driven oversight in musculoskeletal care that could increase administrative complexity for providers.
5. Payer behavior and patient affordability are emerging as dual growth constraints: ASC leaders say narrow networks, rigid payer contracting and expanding audits are limiting reimbursement and steering patients away from ASCs.
At the same time, higher deductibles and out-of-pocket costs are shifting more financial burden to patients, leading to delays, cancellations and slower collections.
Together, these pressures are constraining growth, compressing margins and creating new access challenges in musculoskeletal care.
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