No Advantage to Medicare Advantage

Many providers have had it with the government plan, and dozens have already left it this year.

In the upcoming weeks the Senate Permanent Subcommittee on Investigations will release a report on Medicare Advantage following up on the concern with MA plans' prior authorization requirements, including the use of AI.

"Anybody following our hearings and public comments knows our findings will be very dramatic and powerful," Richard Blumenthal, a Democratic senator from Connecticut and chair of the subcommittee, said during a press conference on Oct. 2.

"What we have found is, essentially, there is no advantage for people in Medicare Advantage, all too often."

Last year, the committee sent letters to CVS Health, UnitedHealth and Humana to seek internal documents detailing how these payers managed claims, including their use of AI in the claims process. These payers, among others, have been accused of using AI to improperly deny care.

Recently MA plans have faced scrutiny from lawmakers over several issues, including prior authorization requirements, overpayments and misleading marketing.

As the tension around Medicare Advantage grows, CFOs are taking note not just of the current MA challenges, but also the ones that lie ahead.

According to Doug Watson, Allina Health, a CFO is at a huge disadvantage if they don’t understand how MA programs work at the insurer level.

Population Health & Medicare Advantage

HealthLeaders spoke with Rick Gundling, Senior VP for Content and Professional Practice at the Healthcare Finance Management Association (HFMA). Gundling says in today’s healthcare regulatory landscape, hospitals are going to have to figure out how to stay afloat with less.

“Medicare Advantage payments are not expanding, so you're trying to do this on a much tighter rope, and I think that causes a lot more pressure,” Gundling said.

Gundling also highlighted how these challenges will have greater effects on smaller rural health systems, and cost cutting strategies will need to be more aggressive.

“You're on a much tighter margin,” Gundling said. “You don't have the same financial resources.”

With a rapidly aging population, low birth rates, and Medicare Advantage reimbursement challenges, the healthcare environment has created a perfect storm for health systems and they will need to prepare for the intensive care of a senior population, including implementing different care strategies that focus on this population’s specific needs.

However, coupled with the reimbursement challenges, the industry has seen 27 providers ditch the plan this year so far. According to Gundling, the trend is leaving health systems with fewer options, turning hospitals into “de facto collection agencies.”

As CFOs search for long term solutions amid MA woes, Gundling says they will have to turn to Medicaid funding and look for efficiencies. Gundling says CFOs will need to ask themselves: “Should we narrow down the types of services that we're providing if we can't afford it?”

This will go beyond cost cutting but will involve strategic look at how health systems provide care and understanding the regulatory structure of insurance.