Payers and providers are increasingly butting heads over Medicare Advantage contracts, with some health systems opting to go out-of-network.<\/p>\n
There has been a \u201cspike\u201d\u00a0 in contentious negotiations since 2022, as providers and payers struggle to manage rising costs, according to Citseko Staples Miller, managing director and leader of the healthcare and life sciences public affairs team at FTI Consulting, which tracks provider-payer negotiations.<\/p>\n
For years, providers have demanded higher reimbursements to address workforce shortages, rising labor costs and increasing administrative expenses. Now, due in part to pandemic-induced inflation, some providers have reached a breaking point, leading them to sever ties with specific plans.\u00a0<\/p>\n
\u201cProvider challenges in delivering patient care amidst onerous payer coverage barriers or insurer refusal to contract with providers \u2014 unless they accept below-cost reimbursement rates or business terms that interfere with efficient care delivery \u2014 may lead providers to make the difficult decision to not participate in a particular network,\u201d an American Hospital Association spokesperson said in an email.<\/p>\n
Payers, meanwhile, are refusing to foot the bill, as they face higher costs for drugs, procedures and overall care delivery.\u00a0<\/p>\n
\u201cHospital systems\u2019 unfair and opaque billing practices continue to drive up costs for seniors and other Americans,\u201d\u00a0 a spokesperson for insurer lobby AHIP said in an email.<\/p>\n
In other words, \u201cthe same intractable problems continue to be intractable,\u201d said Paul Ginsburg, professor of health policy at the Sol Price School of Public Policy and senior fellow at the Schaeffer Center for Health Policy and Economics at the University of Southern California.<\/p>\n
Other factors, such as growing Medicare Advantage enrollment and a gradual decline in patients covered by employer-sponsored insurance, have intensified the pressure.\u00a0\u00a0<\/p>\n
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Medicare Advantage contract disputes on the rise<\/h4>\n
Total contract disputes and those involving Medicare Advantage, Q1 2022 – Q3 2025<\/p>\n