Rural hospitals rejecting Medicare Advantage? – Healthcare Economist

That may be the case. Modern Healthcare Reports:

Last month, St. Charles Health System threatened to cut ties with all Medicare Advantage plans next year, a move that would leave about 26,000 local beneficiaries without access to a hospital less than 100 miles away.
“The reality of Medicare Advantage in Central Oregon is that it simply has not lived up to its promise,” Dr. Steve Gordon, CEO of St. Charles Health System, wrote in a news release at the time. “A program intended to promote seamless, higher-quality care has instead become a fragmented patchwork of administrative delays, denials and frustrations,” he said. The Bend-based nonprofit company declined to make an executive available for an interview.

St. Charles Health System is not alone. The article goes on to say that rural hospitals are “disproportionately affected by factors such as reimbursement cuts or rejected and delayed payments of Medicare Advantage plans because Medicare enrollees make up the majority of their patient populations.”

Rural hospitals are particularly sensitive because Medicare Advantage enrollment among rural beneficiaries has increased from 11% to 40% of all rural Medicare beneficiaries between 2010 and 2023.

On the positive side, plan choice for rural Medicare Advantage beneficiaries has increased, but this competition has led MA plans to target lower premiums and shift these lower costs to hospitals with lower reimbursements and delays.

My colleague from FTI Consulting Adam Broder He was also quoted in the article, stating:

“It’s like, ‘What’s the point of fighting over rates if we can’t even get paid?’” Broder said. “They make money from commercial contracts. The margins are much smaller for Medicaid or Medicare, and if they cannot be paid on time, adequately or in full, that will lead to a dispute.”

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