CMS shadow bundles represent a call to action for orthopaedic surgeons in the changing healthcare landscape

Since 2010, the Centers for Medicare & Medicaid Services (CMS) has actively sought to transform U.S. healthcare to a value-based model, stating that all Medicare beneficiaries with Parts A and B will be in a care relationship with accountability for quality and total cost of care by 2030. In another step toward that strategic objective, CMS began releasing “shadow bundle” data in 2024 to accountable care organizations caring for Medicare beneficiaries. This information reports specialist costs for certain procedures or conditions. These shadow bundles have important implications for orthopaedic surgeons in healthcare transformation.

What are shadow bundles?
Shadow bundles provide an average cost for a particular specialist as it relates to defined clinical episodes of care. Shadow bundle data were released for “information only” and are not yet accounted for in bundled payments. As an example, shadow bundle data would inform participating physicians that Surgeon A typically costs $2,000 more per knee replacement than Surgeon B. This knowledge influences decision-making for the referring physician who is carrying the financial risk of caring for patients within the accountable care organization. If proximity, reputation, and other factors are otherwise equal, the referring provider has the financial incentive to direct care to Surgeon B over Surgeon A.

The released shadow bundle data utilize methodology from the Bundled Payment for Care Improvement Advanced model. Notably for orthopaedic surgery, certain spine, joint replacement, and hip fracture procedures are included. Experience in this program shows that the outcomes measured lean heavily on costs of perioperative care, particularly for complications, readmissions, and post-acute care settings — all important measures, though lacking granularity in risk stratification, patient demographics, and market forces.

Presumably, shadow bundles represent a foray into compiling and distributing this type of information. If proven successful at curbing costs, the savings initially seen with redirecting specialty care will decrease with time, and the overall cost in the market likely would adjust down to the lowest-cost provider.

Measuring value and implications for orthopaedic practice
The general discussion of value in healthcare leads with the simple formula of quality over cost. As it stands, nearly all value-based care programs ultimately look at cost. These are the easiest data to find and measure.

Quality and performance are much more nebulous. Each participant in the healthcare system views the equation differently. Arguably, the payer is most incentivized to decrease cost, but focusing only on cost ultimately leads to the proverbial “race to the bottom.” If reducing cost is the sole strategy, the only options are the continued decline of reimbursement and prescription of further cost-controlling measures.

The costs of running a medical practice are increasing and driving healthcare consolidation, as physicians seek ways to deal with declining reimbursements, increasing burdens of providing care, and rising medical practice expenses. Consolidation already has shown a marked increase in the past five years, with independent practices representing less than 25% of the U.S. physician workforce. This has negative consequences for competition and may not curb costs in healthcare.

Surgeons instinctively care about providing high-quality care and want to know that they are doing well in their profession. But how can surgeon performance be measured aside from cost data? Outcome measures and patient-reported outcomes exist but have traditionally been developed for research applications and are limited. Patients seem well-suited to determine value. They want high-quality care at a reasonable cost, but they are the least informed. They cannot know the intricacies of performing a surgery that requires years of training to master, and they do not have access to all the scientific data.

So, the conundrum posed by these shadow bundles is rising costs, poorly applied quality metrics, and competing interests for healthcare dollars. The typical physician’s response to healthcare policy is to bury their heads in their work. Someone will figure this out, right? That is happening! Assuredly, surgeons will not be pleased with the outcome if they remain bystanders.

Healthcare is a perpetual example of allowing various interests to determine how the “business is run.” What business allows for such negotiation on reimbursement for service, variability in pay even within the same market, or delays to remuneration for service?

Although there is some truth to “you get what you pay for,” the current price tag is not sustainable. Through shadow bundle data, interested parties are now looking at surgeon costs and using that to inform medical decisions. Unsettling as this may seem, it is happening.

Taking ownership of orthopaedic value
Orthopaedic surgeons must take charge of value-based transformation and direct musculoskeletal care, as they have spent their lives understanding every detail of the human skeleton with its ligament and muscle attachments. They are the ones to educate their patients and to deliver the care.

To be the arbiters of orthopaedic value, surgeons must get involved at the national, regional, or community level. Engage in local facility meetings. Discuss the metrics and drive the conversation. Articulate how quality orthopaedic care should be delivered. Link arms with other surgeons. We can still compete on quality while reaching a consensus to decrease unnecessary variability and cost. As in most things in this country, more unites us than divides us. This takes time, but it is time well spent. Non-physician healthcare workers want physician leadership. Patients definitely do.

Orthopaedic societies should make every effort to unite the House of Orthopaedics. Leverage the collective wisdom of members to best define quality metrics for high-cost and high-visibility orthopaedic procedures. When societies foster member success, they unleash an army of highly skilled professionals that can solve the most complex healthcare challenges. Patients will reap the reward.

The release of CMS shadow bundle data is another step in the long reshaping of healthcare. More changes will follow. Let this be a rallying call to take the reins and direct the future of musculoskeletal care.

The mission is threefold. First, identify areas of wasteful spending in the continuum of care and work with key players in the community to eliminate them. Second, through patient education, local committee involvement, or societal volunteer work, define quality and performance and show conclusively that orthopaedic surgeons are the indisputable champions of musculoskeletal health. Third, do not forget the value of expertise and skill. Unapologetically, work hard and demand fair consideration of that work. Change is here. Orthopaedic surgeons should not let others dictate their practice but rather be the leaders who define the delivery of musculoskeletal care.

Creighton C. Tubb, MD, FAAOS, is a private practice hip and knee arthroplasty surgeon at New Braunfels Orthopaedic Surgery & Sports Medicine and currently serves on the AAOS Health Care Systems Committee.

Richard C. Mather III, MD, MBA, FAAOS, is a clinical associate professor at Duke Orthopaedics in Durham, North Carolina.

References

1. Innovation Center Strategy Refresh. Centers for Medicare & Medicaid Services. 2021. Accessed August 17, 2025. https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper.
2. Alston M, Champagne N, DiNinno D, Kramer E, Murphy C. Shadow bundles: A big opportunity for MSSP and REACH ACOs. Milliman. February 13, 2024. Accessed August 17, 2025. https://www.milliman.com/en/insight/shadow-bundles-big-opportunity-mssp-reach-acos
3. Davis Z, Cartossa C. Shadow Bundles are Coming Soon to MSSP and ACO REACH. Wakely. January 2024. Accessed August 17, 2025. https://www.wakely.com/blog/shadow-bundles-are-coming-soon-to-mssp-and-aco-reach/