Health systems' next Medicare Advantage move

Health systems have been sparring with Medicare Advantage plans over delayed and denied coverage, and some have dropped contracts with the private plans.

Medicare Advantage denials increased almost 56% for the average hospital from January 2022 to July 2023, according to data from a joint American Hospital Association and Syntellis report. The denials and inconsistent reimbursement led to a 28% drop in hospital cash reserves.

But Medicare Advantage enrollment is growing and insurers see opportunity with these plans as more people become eligible for Medicare. According to KFF, Medicare Advantage enrollment increased 8%, or 2.3 million beneficiaries, in the last year.

During a panel at the Becker's 11th CEO+CFO Roundtable, Will Bryant, CFO of Chapel Hill, N.C.-based UNC Health, said his system has forged partnerships with payers but still experiences challenges with Medicare Advantage plan denials. While the health system aims to expand partnerships with payers in some areas, they'll likely experience contraction with Medicare Advantage plans that aren't performing well, and aren't good partners for the system.

"We will ultimately pick a couple of partners going forward, and I think a lot of health systems are going to do this," said Mr. Bryant. "They're going to be the partners who act like partners and not who deny care in order to bolster their billions of dollars of quarterly earnings."

He said providers need a better way to communicate and partner with payers to develop mutually beneficial solutions "without having to have it slammed down our throat by CMS or others."

"I'm hopeful that we'll have opportunities to go down the road with some of these payer-provider partnerships to help solve some of these problems that candidly, we together have created over the course of the last 30-plus years," said Mr. Bryant.

CMS is already taking a close look at Medicare Advantage marketing tactics and proposed more regulations earlier this month that would prohibit volume-based bonuses to third-party marketing organizations and require health plans to provide a mid-year notice for enrollees about any supplemental benefits changes enacted.

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