How rural hospitals are fighting Medicare Advantage

Medicare Advantage plans may offer more benefits but also
have rules that can limit patients' choices. (Anthem website)

St. Charles Health System in central Oregon has "threatened to cut ties with all Medicare Advantage plans next year, a move that would leave an estimated 26,000 local beneficiaries without access to a hospital less than 100 miles away," reports Nona Tepper for Modern Healthcare.

"A program intended to promote seamless and higher quality care has instead become a fragmented patchwork of administrative delays, denials and frustrations," St. Charles CEO Steve Gordon said in a news release last month.

Tepper reports, "Health systems nationwide appear to share Gordon's consternation, especially those similarly located in rural areas. Rural healthcare providers tend to be disproportionately affected by factors such as reimbursement cuts or denied and delayed payments from Medicare Advantage plans because Medicare enrollees make up most of their patient populations. Cutting off Medicare Advantage plans, or at least declaring that to be a possibility, is a response to the growing market power these carriers have, especially over rural providers.

According to Tepper, "Rural Medicare Advantage enrollment is growing faster than overall enrollment: Since 2010, the share of rural beneficiaries who choose private plans over the traditional program has more than quadrupled, to 40% from 11%, according to KFF survey results published this month.

"Among the 58 publicly known contract disputes between insurers and providers this year, 35—more than half—involved Medicare Advantage carriers, according to data compiled by FTI Consulting. 

"Most conflicts center on how health insurance companies do business more than on reimbursements, said FTI Consulting Managing Director Adam Broder."

Tepper reports: "At Aspirus Health, some Medicare Advantage insurers deny as many as 35% of claims, said Matthew Heywood, CEO of the Wausau, Wisconsin-based nonprofit health system. In response, the 17-hospital chain is renegotiating contracts to include provisions regarding prior authorizations and claims processing times, he said."