Health systems are growing increasingly frustrated with fighting to receive payments from insurers in the Medicare Advantage program, which now provides health coverage to more than 55% of the nation's older adults, about 33.8 million people.
MA continues to grow, but so do its administrative challenges, as health insurers prioritize their margins in the segment.
Hospitals are the most vulnerable provider to rising administrative and financial MA burdens, "given growing risks to reimbursement from MA plans relative to traditional Medicare, as well as the payment risk and higher complexity around prior authorization requirements," according to a recent report from S&P Global. "We also see future risks to providers if at some point CMS addresses the MA program's higher-than-expected spending."
As insurers prioritize profits and delay payments, hospitals find themselves caught in a taxing and costly battle to provide high-quality care while navigating excessive administrative hurdles. While some insurers thrive in MA, many hospitals are struggling to stay afloat, with a growing number of providers opting to end their participation in MA programs.
"This has a huge negative community impact, a negative financial impact, and a negative patient care impact," Katie Kucera, CFO of Carson Tahoe Health in Carson City, Nev., told Becker's.
By May 30, 2025, patients with commercial and MA coverage from UnitedHealthcare will be out-of-network with Carson Tahoe, which includes two hospitals and a 20-location provider network. Barriers with prior authorizations and referrals, delays in care, and the time and money Carson Tahoe spends to get paid are the key reasons for the decision.
"At some point, UnitedHealth has to be held accountable," she said. "This is probably one of the worst situations a CFO can be in. I know this doesn't bode well, but nor does fighting for dollars we're expecting or putting patient care second."
A spokesperson for UnitedHealthcare told Becker's it intends to use the remaining months on the contract to "engage in good-faith negotiation in an effort to renew our relationship so the people we serve have long-term access to Carson Tahoe Health."
Many health systems cite similar MA challenges, particularly with UnitedHealthcare, and are taking a tougher stance on contract negotiations with commercial payers.
Durham, N.C.-based Duke University Health System is another system that is locked in contract negotiations with UnitedHealthcare. The health system argues that administrative barriers prevent it from receiving fair and timely payments.
"At Duke, UHC denies payment for care 40% more than other national insurance carriers we contract with. Duke Health overturns 97% of these denials after significant effort (people, time and technology)," CEO Craig Albanese, MD, told Becker's.
Duke employs 236 full-time workers to appeal all denials from payers, which is not in the spirit of partnering to provide value to beneficiaries, patients and communities, according to Dr. Albanese, who said UnitedHealthcare "has been 57% slower to pay claims than our other payers and takes over 60 days to respond to claims they deny."
Should Duke and UnitedHealthcare be unable to come to an agreement, the health system's hospitals, facilities and physicians will be out of network, effective Nov. 1, for the employer-sponsored commercial plans, including UMR, and Medicare Advantage plans, which include a group retiree and dual special-needs plan.
"It remains our top priority to renew our relationship and ensure continued access to Duke Health," UnitedHealthcare said in a statement. "We delivered a new proposal on Oct. 1 that includes meaningful rate increases. We continue to await a counter. We urge the health system to provide a proposal North Carolina families and employers can afford. We believe quality care can also be affordable and the people of North Carolina deserve both."
In August, after a highly publicized dispute, Trinity Health of New England, part of Livonia, Mich.-based Trinity Health, and UnitedHealthcare inked a new multi-year contract for its hospitals, facilities and its physicians. The agreement is retroactive to July 1, 2024, and includes UnitedHealthcare employer-sponsored commercial plans, MA plans and senior care options.
Stuart Kilpinen, Trinity Health's senior vice president of payer strategy and product development, told Becker's that the system had been experiencing significant challenges with MA, and with UnitedHealthcare in particular.
"Over 10% of the claims we submit are denied initially, which puts nearly $100 million of annual revenue at risk for us. A lot of that is related to Medicare Advantage," Mr. Kilpinen told Becker's in a May 13 interview. "What we can't stand for is increased denials, downgrades and delays in payment. That's one of the issues we're trying to solve with UnitedHealthcare — to balance that and have reasonable approaches to addressing authorization, precertification and those types of programs."
Trinity said it is willing to help address the underlying cost of MA, but work collaboratively through incentive programs. Price transparency data has led to collaborative and successful negotiations with some payers, but there are still a lot of holes in the data as payers and providers continue to work to make that information more usable.
"We want to be able to evaluate transparency data — not only to evaluate how we are reimbursed versus other health systems — but also how our contracts compare payer to payer," Mr. Kilpinen said. "Many payers are concerned about having competitive contracts, which we're in agreement with. We want balance and fair payment for us and we want it to afford the payers that we work with equivalent payment rates as well. It's been better with more access to that transparency data, which is a key point in our negotiations, but there's still a long way to go."