Advancing Value-Based Care in Orthopaedic Surgery: Lessons from Early Center for Medicare and Medicaid Innovation Models and a Framework for Sustainable Success
Abhinav R. Balu, Benjamin Schwartz, Christian Pean, Kevin J. Bozic, Philip K. Louie
Adult reconstruction and adult spine surgeons practicing at Medicare-participating hospitals face expanding exposure to mandatory value-based payment models. The Transforming Episode Accountability Model began on January 1, 2026, in approximately 741 hospitals across 188 core-based statistical areas and includes lower-extremity joint replacement and spinal fusion among its 5 surgical episodes. The Expanded Comprehensive Care for Joint Replacement Model has been proposed for nationwide implementation by 2028. Pediatric orthopaedic practice and other subspecialties that primarily serve non-Medicare populations have limited direct exposure to these specific programs. Physician engagement in governance structures, including comanagement arrangements and clinically integrated networks, has been associated with more favorable clinical and financial outcomes under bundled payment programs. When evaluating value-based contracts, relevant considerations include the methodology for distributing reconciliation payments, risk-adjustment approach for both target prices and individual performance, and governance authority over protocol development and implant selection. The Centers for Medicare and Medicaid Services has finalized a mandatory patient-reported outcome measure for elective primary total hip and knee arthroplasty, with reporting beginning in the 2028 calendar year and tied to hospital payment determinations. The measure requires paired preoperative and 1-year postoperative outcome data from a majority of eligible patients. Comparable measures are anticipated for adult spine and other adult orthopaedic procedures over time. Pediatric orthopaedic practices are not subject to this measure in its current form. Early bundled payment programs achieved savings primarily through reductions in postacute care utilization, with complication, readmission, and mortality rates functioning as quality safeguards on that spending focus. A more complete framework for value measurement organizes metrics across a tiered hierarchy spanning care processes, short-term utilization and cost, intermediate clinical outcomes, and long-term patient-reported outcomes. The framework applies conceptually across orthopaedic subspecialties, including pediatrics, though current programs from the Center for Medicare and Medicaid Innovation incorporate its elements primarily in adult reconstruction and adult spine care.