The healthcare industry is facing increased challenges with Medicare Advantage plans, as delays and denials of coverage have led to some systems opting to drop contracts with private plans. A joint report by the American Hospital Association and Syntellis revealed that Medicare Advantage denials rose almost 56% for the average hospital from January 2022 to July 2023, resulting in a 28% drop in hospital cash reserves.
Despite these challenges, enrollment for Medicare Advantage plans is on the rise, with insurers seeing an opportunity as more people become eligible for the program. According to KFF, Medicare Advantage enrollment increased by 8%, or 2.3 million beneficiaries, in the past year alone. However, some health systems like UNC Health are struggling to work with Medicare Advantage plans that are denying care to increase their earnings. This has led them to form partnerships with more reliable payers and consider contracting with fewer Medicare Advantage plans that are not good partners.
Will Bryant, CFO of UNC Health, expressed his concerns about the need for better communication and partnership between payers and providers during a panel at the Becker’s 11th CEO+CFO Roundtable. He emphasized that health systems need to work together with payers to develop mutually beneficial solutions without interference from government agencies such as CMS. He hoped that future payer-provider partnerships will help resolve the problems that have arisen over the past 30 years.
In response to these challenges, CMS is proposing new regulations aimed at addressing issues with Medicare Advantage plans. These include prohibiting volume-based bonuses for third-party marketing organizations and requiring health plans to provide a mid-year notice for any supplemental benefits changes enacted by them. The hope is that these regulations will improve communication between health systems and Medicare Advantage plans and lead to better outcomes for patients.