Living with Medicare Advantage can be draining for your organization, but it doesn't have to feel hopeless.
The unfortunate reality for providers is that Medicare Advantage (MA) is as popular as ever, meaning the hurdles that come with accepting the plan are here to stay.
Providers have little choice but to consider how they can alleviate the effects of low reimbursement, high denial rates, and increased administrative burden associated with MA to maintain the financial and operational health of their organization.
How MA can be crippling
Unlike traditional Medicare, MA plans are run by private payers, which have their own set of reimbursement rates and schedules, as well as claims processes.
Even when providers are reimbursed, payments can feel inadequate due to payers exerting power in contract negotiations to keep rates down. However, providers often face delayed payments or denials that place more strain on staff and administrative costs.
MA is particularly known for its prior authorization requirements for services, which force providers to submit additional documentation and wait before administering care.
The results can be devastating to organizations, like in the case of Bristol Hospital. Last year, CEO Kurt Barwis said the operator would eliminate 60 jobs, including 21 layoffs, to offset the costs stemming from MA delays and denials.
"The Medicare Advantage abuse is outrageous," Barwis told the Hartford Courant.
In many other cases, hospitals and health systems are going to the extent of dropping MA contracts to avoid the headache altogether.
Sanford Health, one of the Midwest's largest health systems, made the decision to do just that last August, when it announced it would end its participation with Humana's MA plan.
"We have attempted to work with Humana for several years, but unfortunately, we have continued to experience delays in patient care, barriers to scheduling and denials of coverage causing financial burden and undue stress to our patients," said Martha Leclerc, vice president of corporate contracting for Sanford Health.
The downside of the move is losing MA beneficiaries as patients, which is why not every provider will have the luxury of severing ties with MA payers.
Still, the strategy is one more and more leaders are considering. In last year's survey by the Healthcare Financial Management Association, 16% of health systems said they plan to stop accepting one or more MA plan in the next two years, while 45% reported considering the same without having made a final decision.
What's clear is that the toll MA is taking on providers everywhere can't be ignored.
Reclaim your ground
MA isn't going anywhere anytime soon, so leaders must rethink how they approach payer contract negotiations and improve efficiency within their own organization to withstand the negative impact from the private program.
The next webinar in our The Winning Edge series will dive into ways leaders can mitigate the financial and operational challenges stemming from Medicare Advantage, featuring insight from hospital CEOs.
Our distinguished panel includes:
- Holly McCormack, president and CEO of Cottage Hospital, and HealthLeaders Exchange member
- Rachelle Schultz, president and CEO of Winona Health, and HealthLeaders Exchange member
- Jay Asser, event moderator and HealthLeaders CEO editor
This isn’t just another webinar—it’s your chance to learn from the best in the business and walk away with strategies you can implement immediately.
Join us as we address problems, share solutions, and help you in the battle against Medicare Advantage.
Register here to reserve your spot and see what other topics we have in store this month.
Our Summer 2025 CEO Exchange is being held on June 4-6 at the Park Hyatt Aviara in Carlsbad, CA.
Are you a CEO interested in attending our event and strategizing with other attendees? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Medicare Advantage places significant financial pressure and administrative burden on providers due to issues with reimbursement, denials, and delays.
This week's The Winning Edge, featuring a pair of hospital CEOs, will tackle strategies for provider organizations to push back against the forces of MA.