92% of rural Nebraska hospitals report financial hardship caused by Medicare Advantage plans
A survey of 92 Nebraska rural healthcare organizations revealed that patients covered by Medicare Advantage (MA) plans are not getting adequate care—and some hospitals in the state plan to end their contracts with MA insurers.
The Nebraska Rural Health Association hosted a meeting with its member organizations, at which they discussed challenges with care delivery and reimbursement for patients covered by MA. Many expressed concerns that these health plans—promoted to seniors as being superior to traditional Medicare—actually put patients' lives in jeopardy.
“MA challenges the future of critical access hospitals due to lower reimbursement rates, slower or denied payments and increased administrative burdens,” Jed Hansen, executive director of the Nebraska Rural Health Association, said during the Oct. 2 meeting with hospital leaders. “Without changes to MA, our rural hospitals may be forced to cut staff and services, further harming patient care. Over time, some of our rural hospitals may be forced to close altogether.”
More than 54% of seniors eligible for Medicare have opted into MA plans as an alternative, according to a 2024 report from the Kaiser Family Foundation. But the risks may outweigh the benefits, especially if provider organizations continue to struggle to deliver care to MA patients.
At the virtual event, 84% of Nebraska Rural Health Health Association members agreed MA plans fail patients, largely due to prior authorization requirements that cause repeated delays of necessary care because of unreasonable rejections, requiring appeal for patients who urgently need treatment. Even when approved without rejection, patients can end up waiting months to receive care.
In rural Nebraska, some hospitals are responding by opting out. Starting in 2025, the Great Plains Health Innovation Network—a health system that includes provider practices, many of which serve rural areas—said it will opt out of most MA plans and encouraging its patients to switch to standard Medicare.
“To put the patient first, we can no longer be under contract with a plan that causes significant delays in care, longer hospital stays and outright denials of care,” said Narayana M. Koduri, MD, Great Plains Health's chief medical officer, said in a May announcement. “MA, as it currently exists, limits access to care in the region, as MA patients often have longer hospital stays as they await pre-authorization for post-acute services, which, in turn, limits bed availability for patients who truly need access to acute hospital care.”
Other healthcare leaders at the virtual meeting expressed similar concerns and may also abandon their MA contracts.
A recent report from the Nebraska Rural Health Association echoes the sentiment of its members. According to the report, patient enrollment in MA in rural areas is only rising, but the challenges associated with delivering care to those patients are only getting worse.
For patients, MA isn’t a great deal either. Where Medicare can often deliver the same services with no out-of-pocket expenses, patients could face upwards of $9,000 to $13,000 in co-pays under MA—with the lower figure applying to patients deemed in-network.
The plans are not good for business either, according to the Nebraska Rural Health Association. In its report, 92% of members said their hospitals or practices face financial struggles as a result of shaky MA reimbursement.
MA insurers face national criticism
In July, an investigation by the Wall Street Journal found MA payer organizations were responsible for around $50 billion in fraud due to “hundreds of thousands of questionable diagnoses that triggered extra taxpayer-funded payments,” including for deadly illnesses where patients received no care and for conditions that “people couldn’t possibly have.”
That same month, a survey from the American Medical Association (AMA) of more than 1,000 physicians found care delays for patients are rampant. Of respondents, 78% reported their patients have abandoned care due to challenges with the prior authorization process.
The AMA has called for reforms, including backing the Gold Card Act of 2023 (H.R. 4968), a bill the organization said would simplify reimbursement by exempting some patient care from the prior authorization process.
The full report from the Nebraska Rural Health Association can be found here.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.