In spine, the commercial book carries the practice
The gap is structural and large. National benchmarking puts 2025 commercial reimbursement for medical services at roughly 196% of Medicare fee-for-service on average — another way of saying Medicare pays far below commercial for the same work.
In spine that spread is compounded by a long decline in Medicare reimbursement for neurosurgical procedures and by a contracting convention that quietly imports the problem: many commercial agreements are pegged to a percentage of Medicare, so every Physician Fee Schedule cut flows straight into private payment. The cases feeling it most are precisely the ones that demand the most — multilevel lumbar fusions, cervical disc arthroplasty, deformity correction, and revisions — and much of the pressure is concentrated in the Medicare Advantage population.
A spine practice that leaves its commercial rates pegged to Medicare has outsourced its pricing to CMS. The strategic move is to break the peg, price high-acuity work to its true resource intensity, and scrutinize the Medicare Advantage terms where fee-schedule logic does the most damage.
Contracting for high-acuity spine
The levers below move a practice from a Medicare-indexed baseline toward rates and structures that reflect what complex spine care actually requires.
Break the percentage-of-Medicare peg
Move key procedures to fixed fee schedules or case rates that do not automatically absorb PFS cuts. Where a full break is not achievable, negotiate a floor and de-couple the highest-acuity codes from the index.
Price acuity explicitly
Position multilevel fusion, arthroplasty, deformity, and revision work on their resource intensity — operative time, implants, and experienced teams — rather than a blended rate that undervalues them.
Scrutinize Medicare Advantage terms
MA is where fee-schedule logic bites hardest on complex cases. Examine authorization, downcoding, and payment patterns, and negotiate MA rates and processes deliberately rather than defaulting to the FFS analog.
Consider episode and case-rate structures
Where the data supports it, shared-savings and episode-based arrangements can trade predictable volume and faster authorization for terms that escape an eroding fee-for-service baseline.
Not every group has the leverage to command large increases, and the case must be built on evidence — acuity data, outcomes, and market position. But leaving rates indexed to a declining fee schedule is a decision too, and in high-acuity spine it is usually the most expensive one.
The fee schedule falls. Your contract need not follow.
Spine and neurosurgery sit at the widest point of the commercial-to-Medicare gap, and the contracting conventions many practices inherited quietly tie their fate to a declining fee schedule. The remedy is not a single rate increase; it is a deliberate shift — off the Medicare peg, onto structures that price high-acuity work for what it is, with Medicare Advantage terms examined rather than assumed.
That shift has to be earned with evidence and cannot be won everywhere. But for a practice whose economics depend on the commercial book, indexing rates to CMS is the one decision most likely to compound against it year after year.
Sources
- Milliman, “Commercial reimbursement benchmarking 2025: commercial payment rates as a percentage of Medicare FFS.”
- Journal of Neurosurgery: Spine, “Over 20 years of declining Medicare reimbursement for spine surgeons” (2022); J. Neurosurg., neurosurgical reimbursement trends (2019).
- Becker’s Spine Review, coverage of spine reimbursement trends, payer partnerships, and high-acuity contracting.
- Fulcrum Health Partners analysis.