Ethan Rhodes
Medicare Advantage plans are popular among large employers and state governments, with over half of Medicare-eligible people enrolled in the program. However, hospitals have been dropping these plans due to issues with prior authorizations and denials, which can cause delays in treatment and higher costs for patients. Medicare Advantage plans often have a limited network of hospitals and physicians, and patients may face higher out-of-pocket costs if they require specialized care or treatment outside of their plan's network. As a result, it is important for patients to verify that their preferred hospitals and physicians accept their Medicare Advantage plan before enrolling.
| Characteristics | Values |
|---|---|
| Number of hospitals that accept Medicare Advantage plans | The vast majority of hospitals accept Medicare Advantage plans, but not all of them. |
| Reasons for hospitals dropping Medicare Advantage plans | Issues with prior authorizations, denials, reimbursement rates, and approvals. |
| Impact on patients | Loss of access to trusted doctors and hospitals, longer wait times for appointments, high out-of-pocket costs, and limited access to care. |
| Alternatives for patients | Switching to a different Medicare Advantage plan during the open enrollment period or taking advantage of a 5-star special enrollment period. |
| Benefits of Medicare Advantage plans | Covers the same benefits as Part A and Part B, and may offer additional benefits like vision, dental, prescription drugs, and fitness. |
| Drawbacks of Medicare Advantage plans | Limited network of hospitals and physicians, higher out-of-pocket costs, and potential for catastrophic spending. |
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What You'll Learn
Hospitals dropping Medicare Advantage plans
Medicare Advantage plans are popular with older adults, with over half of America's older adults being covered by them. However, several hospitals and health systems across the United States have decided to stop accepting Medicare Advantage plans or have announced that they will be out of network for some or all Medicare Advantage plans.
In 2023, Becker's Hospital Review, a medical industry trade magazine, reported that hospitals and health systems in at least 11 states would be out of network for some or all Medicare Advantage plans in 2024. Some of the hospitals that have dropped or announced the discontinuation of Medicare Advantage plans include:
- Lawton, Oklahoma-based Comanche County Memorial Hospital
- Houston-based Memorial Hermann Health System
- York, Pennsylvania-based WellSpan Health
- Newark, Delaware-based ChristianaCare
- Greenville, North Carolina-based ECU Health
- Zanesville, Ohio-based Genesis Healthcare System
- Corvallis, Oregon-based Samaritan Health Services' hospitals
- St. Charles Health System in Oregon
The primary reasons for hospitals dropping Medicare Advantage plans are administrative challenges, including excessive prior authorization requirements, denial rates, and slow payments from insurers. Prior authorization can lead to delays in care and increased administrative burdens for providers, as they have to seek approval from insurance companies for certain tests or treatments recommended by doctors. Additionally, Medicare Advantage plans may result in restrictions to patient care and longer hospital stays.
If your preferred hospital stops accepting your Medicare Advantage plan, you may need to switch your insurance or provider. You can consider taking advantage of a 5-star special enrollment period to switch to a 5-star plan in your area. It is essential to research and contact the provider to ensure they are in-network for your preferred plan.
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Issues with prior authorisations
Medicare Advantage plans have been associated with issues pertaining to prior authorisations, which have led to hospitals dropping these plans. Prior authorisation refers to the process of obtaining approval from an insurance company before providing a service to ensure member safety and lower the total cost of care. However, it has been criticised for causing delays and creating barriers to necessary care.
Medicare Advantage insurers made nearly 50 million prior authorisation determinations in 2023, reflecting a steady increase since 2021. The process has been criticised for being onerous and slow, with vague and confusing coverage criteria that are not in line with accepted medical practices. These issues have resulted in additional burdens on providers and patients, delayed access to necessary care, worsening health outcomes, and increased costs.
In response to these concerns, the Biden Administration finalised three rules related to the use of prior authorisation in Medicare Advantage. These rules aim to clarify the criteria for establishing prior authorisation policies, streamline the process, and evaluate its impact on individuals with certain social risk factors. Lawmakers in Congress have also introduced several bills to improve transparency and reform other aspects of prior authorisation.
Despite these efforts, more changes are needed to address the issues with prior authorisation in Medicare Advantage plans. Widespread reports indicate that prior authorisation abuses continue to occur, leading to inappropriate barriers to necessary care. The appeals process for denied claims is crucial, as it can help identify patterns of improper denials and improve the system. However, the additional layer of prior authorisation before the appeals process can create further delays and negatively impact access to necessary care.
To address these concerns, CMS has issued regulations requiring plans to make prior authorisation information available through application programming interfaces (APIs). While this is a positive step towards improving transparency and efficiency, the impact may be limited as the use of APIs by providers and patients is voluntary. Additionally, further reforms are needed to ensure that plans comply with legal standards and that prior authorisation standards are consistent with prevailing medical practices and coverage obligations.
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Patients losing coverage
Medicare Advantage is a version of Medicare that is run by private insurance companies that contract with the government. These plans typically offer extra benefits, such as dental, vision, and prescription drug coverage, which are not included with traditional Medicare. However, Medicare Advantage plans often require prior authorization, which can delay or prevent coverage altogether.
In 2024, more than 50% of Medicare-eligible people were enrolled in Medicare Advantage, a significant increase from 39% just five years prior. However, this year, more than 1 million patients are losing their coverage as insurers and hospitals drop Medicare Advantage plans. This is due to a variety of factors, including financial pressures, regulatory changes, and issues with prior authorizations and denials.
At least 28 health systems in 21 states have stopped accepting some Medicare Advantage plans, and it is expected that up to 420,000 patients could be forced to shop for a different plan. This is particularly impacting Black, Hispanic, and Asian and Pacific Islander beneficiaries, who tend to have lower incomes and may be drawn to Medicare Advantage plans due to their lower upfront costs.
If you are a patient who is losing coverage due to your hospital or insurer dropping Medicare Advantage, there are a few things you can do. If you are outside of an open enrollment window, you may be able to take advantage of a 5-star special enrollment period, which allows you to switch to a 5-star plan in your area. You can also do your research and switch to another Medicare Advantage plan that is accepted by your preferred hospital or insurer. It is important to call and confirm that they are in-network before making the switch. If you are unable to switch plans, you may have to wait for the next open enrollment period or consider moving to a different area.
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Switching insurance providers
Medicare Advantage, also known as Part C, is a Medicare Private Health Plan that allows beneficiaries to receive Medicare coverage from a private health plan that contracts with the federal government. Hospitals have been dropping Medicare Advantage plans due to issues with prior authorizations and denials, causing beneficiaries to switch their insurance or providers.
If you are considering switching insurance providers, it is important to be aware of the specific times each year when you can change your Medicare Advantage plan or switch between Original Medicare and Medicare Advantage. The Fall Open Enrollment Period, also known as the Annual Election Period, occurs each year from October 15 to December 7, with your new coverage beginning on January 1. During this period, you can make a number of changes to your Medicare coverage, such as enrolling in a different Medicare Advantage plan or switching to Original Medicare.
If you are outside of the Fall Open Enrollment Period, there are still options available to switch insurance providers. You may be eligible for a Special Enrollment Period (SEP), which allows you to change your health and/or drug coverage outside of normal enrollment periods under certain circumstances. For example, if your Medicare Advantage plan is leaving your area or you are moving out of your plan's service area, you may qualify for an SEP.
Additionally, if you have a Medicare Advantage plan and a separate Part D plan, you can switch to a Medicare Advantage plan that does not include drug coverage or Original Medicare. However, it is important to note that you cannot change Part D plans.
In some cases, you may also have the right to switch or drop your Medigap policy, which is a supplemental insurance plan that helps cover out-of-pocket expenses. You can switch your Medigap policy during the Medigap Open Enrollment Period, which is a 6-month period after you first enroll. If you switch to a new Medigap policy during this period and decide you do not like it, you have a 30-day "free look" period to change to a different policy. Outside of this enrollment period, you may still be able to switch your Medigap policy in specific situations or if you have a guaranteed issue right, such as if your insurance company breaks the rules or goes out of business.
It is important to do your research before switching insurance providers to ensure that your preferred providers and hospitals are in-network for any new plan you are considering. You can call the provider to confirm their participation in the plan. Additionally, keep in mind that switching insurance providers may result in gaps in coverage, so it is essential to enroll in a timely manner to avoid any disruptions in your healthcare services.
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Hospitals accepting Medicare Advantage plans
Medicare Advantage plans are offered by private insurance companies and approved by the federal government. They cover the same benefits as Part A (hospital insurance) and Part B (doctor visits). Some also offer other benefits that Original Medicare doesn’t cover, like vision, dental, and prescription drugs. Medicare Advantage plans typically use HMO, PPO, or PFFS networks.
While the vast majority of hospitals do accept Medicare, not all of them do. Hospitals in at least 11 states announced in 2023 that they would be out-of-network for some or all Medicare Advantage plans in 2024. This is due to issues with prior authorizations and denials. Medicare Advantage plans require patients to get prior authorization for more services than Original Medicare. As of 2022, nearly 1 in 5 health systems stopped accepting one or more Medicare Advantage plans.
If your preferred hospital stops accepting your Medicare Advantage plan, you might have to switch your insurance or your providers. If you’re outside of an open enrollment window, you might be able to take advantage of a 5-star special enrollment period, which allows you to switch from your current Medicare Advantage plan to a 5-star plan in your area. You can do this once between December 8 and November 30 of the following year.
Medicare Advantage plans can help alleviate surprise costs when a serious health situation arises. However, enrollees could end up paying more in the long run in copays and deductibles if they develop a serious illness. Medicare Advantage companies say that prior authorization has benefits, but they’ve taken steps to ease the burden on providers and patients.
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Frequently asked questions
No, not all hospitals accept Medicare Advantage plans. Hospitals around the country have been dropping these plans due to issues with prior authorizations and denials.
If your preferred hospital stops accepting your Medicare Advantage plan, you might have to switch your insurance or your providers. You can also take advantage of a 5-star special enrollment period, which allows you to switch from your current Medicare Advantage plan to a 5-star plan in your area.
Medicare Advantage plans cover the same benefits as Part A (hospital insurance) and Part B (doctor visits). Some also offer other benefits that Original Medicare doesn’t cover like vision, dental, prescription drugs, and fitness benefits. They also provide all of a person’s coverage in one plan, unlike traditional Medicare.
Medicare Advantage plans often have a limited network of hospitals and physicians. They also require patients to get prior authorization for more services than Original Medicare, which can be a burden for providers and patients. Enrollees could end up paying more in the long run in copays and deductibles if they develop a serious illness.
