Some providers are refusing Medicare Advantage plans
December 10, 2023
Patients who are 65 years old and older qualify for Medicare health insurance. Seniors can opt for Medicare Advantage plans, which, unlike traditional Medicare plans, are administered by private companies (e.g. health insurance carriers). These Medicare Advantage plans can offer various benefits that traditional Medicare plans do not, attracting a number of patients. KFF notes that enrollment in Medicare Advantage plans (as a percentage of total eligible Medicare patients) has grown from 19% in 2007 to 51% in 2023. However, KFF Health News recently reported that an increasing number of provider groups have been refusing to accept some Medicare Advantage plans, citing low reimbursement rates and increased hassles in getting paid.
Without safeguards in place, healthcare costs can rise quickly, resulting in higher insurance premiums. Offering lower reimbursements can help reduce the growth in premiums, but providers are less happy about receiving less compensation. Similarly, practices such as requiring prior authorizations can also curb healthcare spending, but do so at the expense of imposing administrative burdens on providers. Apparently, some plans have push far enough in these dimensions that some provider groups are outright refusing to accept some Medicare Advantage plans.
Interestingly, the article cited a study that showed that "13% of the denied requests for treatment it reviewed and 18% of denied claims were for care that should have been covered." The article also noted that "Studies show that Medicare Advantage costs taxpayers more per beneficiary than the traditional program." While many patients are happier with Medicare Advantage plans, it is unclear whether the government ends up better by offering that option. Given recent refusals by some provider groups to participate, it is also unclear whether Medicare Advantage plans will continue their growth in popularity.