ASCs, physicians and hospitals alike have struggled with declining reimbursements, patient care issues and administrative burdens associated with Medicare Advantage plans — pushing some to drop the program entirely.
ASCs: Many ASCs have long been in deadlocks with CMS and other payers over declining reimbursement rates. When it comes to Medicare Advantage specifically, ASC physicians and leaders have cited reimbursement denials, escalating implant costs and administrative hurdles.
"With the inflationary curve on the rise and another looming cut to the physician fee schedule, it is imperative that we re-examine our payer contracts with all other payers in our market," Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group, told Becker's. "Many of the Medicare Advantage plans in our market are trying to pay below the Medicare physician fee schedule, and none of them are accounting for the implant costs associated with doing surgery in our ASC. I am also looking for steerage from the payers for ASC strategies in our market. As the low-cost/high-value provider in the market, we should see significant streerage to our facility but have not experienced that yet. With our clinical outcomes both surgically and non-operatively, we are the best value around."
At least five health systems with ASCs have dropped or plan to drop Medicare Advantage plans this year, as reported by Becker's.
Physicians: Physician practices have also begun cutting ties with Medicare Advantage, also citing declining reimbursements and patient care issues.
"We currently are no longer accepting Medicare Advantage. The restrictions regarding these plans have made taking care of patients extremely cumbersome," Brian Gantwerker, MD, neurosurgeon at the Craniospinal Center of Los Angeles, told Becker's in January. He went on to describe "ridiculous" denials of routine procedures coupled with payments issues — "late or no payment at all, along with increasingly uncovering the money-making scam MA plans have turned out to be" — as reasons for dropping the program.
Susan Baumgartel, MD, an internal medicine physician in Seattle, left her job at a multispecialty group in part due to increasing pressure to accept and bill patients under Medicare Advantage, paired with the existing decreases to the physician fee schedule.
"The proposed 2025 2.8% fee cut to physician Medicare payments is akin to 'death by a thousand cuts'—gruesome pun intended," she said. "Physician Medicare payment rates have fallen an estimated 29% over the past two decades, adjusted for inflation, yet the cost of running a practice has only risen. This is unsustainable."
Hospitals: Hospitals, who tend to receive reimbursement rates favorable to those of independent physicians and ASCs, have also struggled with pressures of the Medicare Advantage program.
Some hospitals are considering dropping the program due to their vulnerabilities to rising administrative, financial burdens and "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."
Hospitals have cited issues with UnitedHealthcare particularly.
By May 30, 2025, patients with commercial and Medicare Advantage coverage from UnitedHealthcare will be out-of-network with Carson Tahoe Health in Carson City, Nev., which includes two hospitals and a 20-location provider network. The system has cited issues with prior authorizations and referrals, delays in care and strain on time and financial resources.
"This has a huge negative community impact, a negative financial impact and a negative patient care impact," Katie Kucera, CFO of Carson Tahoe Health, told Becker's.
"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."