Medicare Advantage plans have become increasingly challenging for health systems to work with, as they continue to delay and deny coverage. This has led to some systems opting to drop contracts with the 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. Additionally, inconsistent reimbursement led to a 28% drop in hospital cash reserves.
Despite these challenges, enrollment in Medicare Advantage plans is on the rise, with insurers seeing opportunity as more people become eligible for Medicare. KFF reports that Medicare Advantage enrollment increased by 8%, or 2.3 million beneficiaries, in the last year alone. Health systems like UNC Health are finding it difficult to work with Medicare Advantage plans that are denying care and boosting their earnings. As a result, some systems are forming partnerships with more reliable payers and potentially contracting away from Medicare Advantage plans that are not good partners.
Will Bryant, CFO of UNC Health, shared his insights during a panel at the Becker’s 11th CEO+CFO Roundtable about the importance of better communication and partnerships between health systems and payers in developing mutually beneficial solutions without interference from CMS or other entities. He expressed hope that future payer-provider partnerships will help solve the problems that have arisen over the past 30-plus years.
In response to these challenges, CMS is proposing new regulations to address them, including 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 goal is for these regulations to lead to better partnerships and communication between health systems and Medicare Advantage plans so that patients receive high-quality care without unnecessary delays or denials of coverage.