Medicare Advantage enrollment is on the rise, but health systems are facing increased challenges with these plans over delayed and denied coverage. This has resulted in 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. The denials and inconsistent reimbursement also led to a 28% drop in hospital cash reserves.
Despite these challenges, Medicare Advantage enrollment is continuing to grow, with insurers seeing opportunity as more people become eligible for Medicare. Some health systems, like UNC Health, are finding it difficult to work with Medicare Advantage plans that are denying care to boost their earnings. This has led to the development of partnerships with more reliable payers and a potential contraction with Medicare Advantage plans that are not good partners.
Will Bryant, CFO of UNC Health, explained during a panel at the Becker’s 11th CEO+CFO Roundtable that health systems need better communication and partnerships with payers to develop mutually beneficial solutions without interference from CMS or others. He expressed hope that future payer-provider partnerships will help solve the problems that have arisen over the last 30-plus years.
In response to these challenges, CMS is proposing new regulations to address the issue. This includes 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 health systems and Medicare Advantage plans.