Is Medicare Advantage kryptonite to rural hospitals?

A lot of senior citizens really like Medicare Advantage, the private insurance alternative to original Medicare, and there may be almost as many reasons for the preference as there are “MA” enrollees.

However, Medicare Advantage has plenty of critics too. Among the quickest to signal thumbs-down might be leaders of rural hospitals.

That’s because Advantage administrators tend to play hardball with these hospitals when it comes to negotiating pay rates—and, some say, to paying their bills.

KFF breaks down the dynamics and places them in the context of the country’s falling supply of critical-access hospitals in areas of low population density.

From the article, reported by KFF’s chief rural health correspondent and published Oct. 23:

“Private plans now cover more than half of all those eligible for Medicare. And while enrollment is highest in metropolitan areas, it has increased fourfold in rural areas since 2010. Meanwhile, more than 150 rural hospitals have closed since 2010.”

‘Slow pay or no pay’

Among the displeased small-hospital CEOs quoted in the piece is Kelly Adams. He says insurance companies supplying Medicare Advantage are “slow pay or no pay.”

Adams ought to know. He runs 25-bed Mesa View Regional Hospital in Mesquite, Nevada, which has 21 Medicare Advantage contracts with multiple insurance companies—and is owed more than $800,000 for care already provided.

“Mesa View lost about $1.3 million taking care of patients, according to its most recent annual cost report,” writes KFF’s chief rural health correspondent, Sarah Jane Tribble.

Medicare Advantage enrollees may match regular Medicare beneficiaries in national headcounts within three years, Tribble reports.

‘Better value than original Medicare’

Evidently recognizing the potential peril to rural hospitals, a large bipartisan group from both chambers of Congress recently wrote Xavier Becerra and Chiquita Brooks-LaSure, respectively HHS secretary and CMS administrator.

The group’s letter, sent in June, calls for a “balanced approach to prior authorization in the Medicare Advantage program that would remove barriers to patients’ timely access to care and allow providers to spend more time treating patients and less time on paperwork.”

Kibble also quotes a spokesperson for AHIP, formerly America’s Health Insurance Plans, who explains the appeal of Medicare Advantage to seniors.

People are choosing MA, says the spokesperson, because the plans are “more efficient, more cost-effective and deliver better value than original Medicare.”

Read the full KFF article here.

Also of note from the rural healthcare beat:

• In January CMS began offering rural hospitals a dicey payment model. The option lets these hospitals end their inpatient services in exchange for higher reimbursement rates in emergency and outpatient care. Some administrators have told Washington Post healthcare reporters that the deal makes them feel stuck “between a rock and a hard place.”
   
• State lawmakers in Arkansas have OK’d disbursements of federal aid totaling more than $16 million to four rural hospitals. The cash comes from the American Rescue Plan Act (ARPA) of 2021, which covers costs incurred during the COVID-19 pandemic, the Arkansas Advocate reports. The state initially received more than $1.5 billion in ARPA funding, and legislators set aside $60 million in August 2022 as emergency relief for struggling hospitals, the newspaper points out.
   
• Vermont’s Green Mountain Care Board will hold more than 30 virtual meetings over the next four weeks. The body hopes to hear from patients as well as providers from across the state on what needs fixing and what needs re-thinking. The meetings will pick up where 2022 legislation leaves off. The new law calls for spurs to “hospital sustainability and transformation,” according to the online outlet VT Digger. Possible outputs include “proposals for big changes, particularly for hospitals in rural areas with the most precarious budgets.”
   
• A 38-bed hospital in a rural part of Texas is no more. St. Mark’s in La Grange permanently closed its doors earlier this month. The hospital had been hanging on by a thread thanks to COVID relief funding, according to the Texas Tribune. In the decade preceding the pandemic, Texas saw 26 similarly difficult closures in 22 communities—most in the nation, according to the news item. St. Mark’s demise takes more than 50 jobs with it in a host town of fewer than 5,000 residents.
   
• Eleven rural provider orgs in New Mexico have a collective $18 million to build or expand services. And that’s just the first portion of an $80 million allotment to be distributed over the next several weeks by the state’s new Rural Health Care Delivery Fund. “Living in a rural area shouldn’t be a deciding factor for the level of healthcare New Mexicans receive,” Gov. Michelle Lujan Grisham said in announcing the assistance.
   
• A Veteran’s Administration operation in Iowa has banked $1.5 million in federal funds to expand telehealth services for rural patients. The program, which has been up and running for four years, helps “bridge the gap between the need of inpatient hospital medical expertise and [VA] patients who are admitted to rural facilities,” program director Jeydith Gutierrez, MD, tells a local TV station.
   
• Teddy Roosevelt would have been proud. In North Dakota, a group of 23 critical-access hospitals has formed and named itself the Rough Rider High-Value Network. The nascent network says member hospitals will collaborate on clinical and operational initiatives that “strengthen the availability, affordability and quality of care in rural communities” across the Peace Garden State.
   
• In New York state, a rural health system is countering staff shortages by doling out signing bonuses. Bassett Healthcare Network in Cooperstown will award new RNs with $35,000 and incoming radiologic technologists with $20,000. “It’s eye-opening but not surprising,” a staffing company executive tells Radiology Business.