Medicare Advantage faces criticism for administrative burdens, pushing doctors to opt out
In recent years, Medicare Advantage (MA) has seen exponential growth, with millions of patients choosing these plans for their healthcare needs. However, frustrations within the medical community regarding the program's administrative hurdles, particularly prior authorization requirements, have been growing. Medicare payments are also being reduced each year, and the low levels sometimes do not even cover the costs of providing services. This has led some doctors to reconsider their participation.
"We have hospitals and doctors who are just fed up because they weren't getting paid for the services they were providing. Care was also being delayed and patients were being harmed as a result of it," explained Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association (MGMA), in an interview with Health Exec.
He said MA uses private insurance plans to cover Medicare patients, but those private companies must follow rules set by Medicare. MA offers patients a cap on what they will pay during a year, whereas traditional Medicare does not, which usually requires patients to also carry Medigap or other supplemental insurance. However, the limitations of these newer plans are that patients are required to use in-network providers, and there are usually a large number of prior authorizations needed to access care. These often delay care, add costs for providers, and limit access to care if patients do not pursue appeals for prior authorization denials.
Administrative burdens take a toll of providing healthcare
"Many physicians, providers and medical practices are often critical of the Medicare fee-for-service program for its low payments, often below the cost of delivering care. But there is a predictability and simplicity to it from an administrative standpoint. But the issues are increased when they're dealing with MA plans," Gilberg explained.
He said the most "egregious" problem is prior authorization, which MGMA member surveys identify as the number one regulatory and administrative burden clinicians and healthcare organizations face. The process requires providers to obtain approval from insurers before delivering certain treatments or procedures. According to Gilberg, this bureaucratic step often delays care and contributes to widespread dissatisfaction among healthcare providers. He noted that doctors often have to spend time on the phone to explain why a patient needs a test or procedure, speaking to a physician from the insurance company who is often not even in the area of medical specialty relevant to the tests or procedures being discussed.
"We often have situations where procedures tests are approved 90-95% of the time, but still medical practices have to jump through all the hoops and have to hire staff in order to get it authorized," Gilberg said.
The push for Medicare Advantage reform
In response to mounting criticism, the Centers for Medicare and Medicaid Services (CMS) recently implemented reforms in 2024 aimed at reducing the use of prior authorizations in MA. Additionally, legislation addressing the issue is advancing in Congress, with the goal of creating more uniformity between MA and traditional Medicare. Gilberg said these reforms are essential to make healthcare more efficient for both providers and patients.
"This is not saying that there will never be any prior authorization, but is removes more of the frivolous prior authorizations that are always going to be approved, but they still require the doctor to get on the phone, maybe with another doctor outside their specialty, and then take up their clinical time while they're on the phone dealing with administrative matters, which takes physicians away from patient care," Gilberg explained.
He said patients, especially elderly individuals who may not fully understand the limitations of their MA plans, are also feeling the effects. They often do not realize they will have a much more limited choice of doctors and there will be additional authorizations needed could delay care.
Dave Fornell has covered healthcare for more than 17 years, with a focus in cardiology and radiology. Fornell is a 5-time winner of a Jesse H. Neal Award, the most prestigious editorial honors in the field of specialized journalism. The wins included best technical content, best use of social media and best COVID-19 coverage. Fornell was also a three-time Neal finalist for best range of work by a single author. He produces more than 100 editorial videos each year, most of them interviews with key opinion leaders in medicine. He also writes technical articles, covers key trends, conducts video hospital site visits, and is very involved with social media. E-mail: dfornell@innovatehealthcare.com