Medicare Advantage enrollment has been steadily increasing in recent years, with insurers seeing an opportunity to expand their reach as more people become eligible for the program. However, this growth has come at a cost for health systems that have been struggling with delayed and denied coverage from these private plans.
According to a joint report by the American Hospital Association and Syntellis, Medicare Advantage denials rose almost 56% for the average hospital from January 2022 to July 2023. These denials, along with inconsistent reimbursement, led to a 28% drop in hospital cash reserves. This has put financial strain on some health systems, making it difficult for them to maintain their operations and provide quality care to patients.
Despite these challenges, some health systems are finding creative solutions to work with Medicare Advantage plans. For example, UNC Health has partnered with more reliable payers and is considering contracting with fewer Medicare Advantage plans that have a history of denying care. Will Bryant, CFO of UNC Health, expressed hope that future payer-provider partnerships will help solve the problems that have arisen over the last 30-plus years. He believes that better communication and collaboration between payers and providers are key to developing mutually beneficial solutions without interference from government regulators like CMS.
In response to these issues, CMS is proposing new regulations aimed at improving communication and transparency between health systems and Medicare Advantage plans. These regulations include prohibiting volume-based bonuses to third-party marketing organizations and requiring health plans to provide a mid-year notice for enrollees about any supplemental benefits changes enacted. The hope is that these regulations will lead to better partnerships and communication between payers and providers, ultimately improving patient care outcomes while reducing financial burden on health systems.