Providers Are Fed Up With Medicare Advantage

Sanford Health is the latest system to drop its MA plan with Humana. Why the trend?

Across the country, more providers are opting to drop Medicare Advantage (MA) plans creating a new trend within the healthcare landscape.

Sanford Health, one of the largest health systems in the Midwest, recently announced it would no longer accept Humana’s Medicare Advantage plans as of January 1, 2025. This decision will have a considerable impact, considering Sanford Health’s numerous facilities—including 48 medical centers and 211 clinics—and substantial patient population.

The system’s decision reverberates beyond just the affected patients, reflecting broader systemic issues within the Medicare Advantage landscape.

This time last year Scripps announced it was dropping its MA plan, Samaritan Health did the same, as did St. Charles Health System, and Memorial Hermann Health System terminated its MA contracts at the beginning of 2024.

A survey conducted by the Healthcare Financial Management Association reported that:

• 16% of systems are planning to stop accepting one or more MA plans in the next two years.
   
• 45% said they are considering the same but have not made a final decision.
   
• 62% of CFOs believe collecting from MA is "significantly more difficult" than it was two years ago.

Providers often argue that Medicare Advantage plans impose restrictions that can hinder patient care. Low reimbursement rates, complicated billing recesses and stringent pre-authorization requirements have pushed CFOs to their boiling point. The administrative burden and financial strain associated with MA plans is simply not worth it for many health systems.

Sanford’s Impact

According to Sanford Health officials, the administrative and financial struggles have made it increasingly difficult to maintain a partnership that supports both quality patient care and financial viability.

 “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 impact of Sanford Health's decision goes beyond the immediate loss of coverage for beneficiaries, it signals a shift in how healthcare systems may approach their relationships with Medicare Advantage plans going forward. As more health systems reassess the viability of maintaining these plans, beneficiaries may face disruptions in their care, which could lead to broader implications for access and continuity of care.

Moreover, this trend could lead to even more scrutiny and potential reforms in Medicare Advantage policies. Stakeholders, including policymakers, may need to address the concerns raised by providers to ensure that MA plans can fulfill their promise of comprehensive, accessible care without imposing undue burdens on healthcare systems.