Medicare Advantage

Medicare Advantage / en Fri, 25 Apr 2025 19:48:42 -0500 Fri, 25 Apr 25 15:03:34 -0500 Updated Medicare Advantage Question and Complaint Process for Provider Organizations <div class="container"><div class="row"><div class="col-md-8">CMS has released an <a href="/system/files/media/file/2025/04/medicare-advantage-provider-complaint-submission-form-2025.pdf" target="_blank" title="Updated Complaint Form">updated complaint</a> form with instructions for Medicare providers seeking assistance from the Centers for Medicare &amp; Medicaid Services (CMS) in resolving Medicare Advantage (MA) claims issues. The complaint form is a cover sheet that must generally be submitted to CMS in a password-protected file, along with the requested documentation as indicated on the form, to the CMS Drug and Health Plan Operations (DHPO) email at <a href="mailto:MedicarePartCDQuestions@cms.hhs.gov" target="_blank" title="CMS Drug and Health Plan Operations email">MedicarePartCDQuestions@cms.hhs.gov</a>.CMS updated the complaint form to direct Medicare providers with quality-related complaints to submit those complaints to the Center for Clinical Standards and Quality (CCSQ) email at <a href="mailto:BFCCQIOConcerns@cms.hhs.gov" target="_blank" title="Center for Clinical Standards and Quality email">BFCCQIOConcerns@cms.hhs.gov</a>.While CMS allocates its oversight of the MA program across the agency’s<a href="https://www.cms.gov/about-cms/where-we-are/regional-offices" target="_blank" title="CMS regional offices"> regional offices</a>, the agency receives and processes all MA inquiries and complaints from providers through centralized email inboxes. This process replaced the former process of contacting CMS’ regional emails for MA complaints and questions.For CMS to act upon cases submitted through the centralized email, the provider must include all information and documentation requested on the cover sheet; refrain from providing additional documentation not listed on the cover sheet (such as medical records); and certify that an effort has been made to resolve the issue with the MA plan directly prior to contacting CMS.CMS specifies that upon receipt of a complaint, CMS staff will input appropriate cases into the agency’s Complaint Tracking Module and respond back to the provider organization with a complaint ID for reference. While CMS reminds providers that its role is not to determine medical necessity or payment amounts for disputed cases, the agency will seek to identify trends in provider complaints to investigate and address broader issues with MA plans where appropriate.The complaint form cover sheet provides additional information to providers about the types of appeal complaints and claims payment disputes that can be submitted using this form, as well as technical specifications for documentation submission requirements.In addition to the DHPO email, hospitals and health systems may send complaints about inappropriate utilization management criteria or claims processing approaches that they believe do not comply with CMS requirements to the CMS Part C and D Audit email at <a href="mailto:part_c_part_d_audit@cms.hhs.gov" target="_blank" title="CMS part 3 and part d audit email">part_c_part_d_audit@cms.hhs.gov</a>. This may include practices related to prior authorization, concurrent review, or retrospective review to deny or downgrade coverage or payment that the provider believes is not permitted under CMS rules. These types of complaints can be submitted to both the Part C and D Audit email and the DHPO email. Note there is no cover sheet or form required for the Part C and D Audit email. &nbsp;<h2>AHA TAKE</h2>The AHA continues to be concerned about certain MA plan policies that inappropriately restrict or delay patient access to care. The AHA continues to urge CMS to increase oversight and enforcement to address continued gaps in compliance among certain MA plans.The establishment of a streamlined provider complaint and inquiry pathway has been a core part of our advocacy effort to ensure that providers can raise suspected violations of federal rules to federal regulators independent of contractual dispute resolution mechanisms. We applaud CMS’ efforts to create a distinct pathway for providers to submit quality-related complaints and appreciate the agency’s continued efforts to improve the Medicare program.<h2>FURTHER QUESTIONS</h2>If you have further questions, please contact Noah Isserman, AHA’s director of health insurance and coverage policy, at <a href="mailto:nisserman@aha.org" target="_blank" title="Noah Isserman email">nisserman@aha.org</a>. </div><div class="col-md-4"><a href="/system/files/media/file/2025/04/updated-medicare-advantage-question-and-complaint-process-for-provider-organizations-advisory-4-25-2025.pdf"><img src="/sites/default/files/inline-images/cover-updated-medicare-advantage-question-and-complaint-process-for-provider-organizations-advisory-4-25-2025.png" data-entity-uuid data-entity-type="file" alt="Member Advisory: Updated Medicare Advantage Question and Complaint Process for Provider Organizations PDF" width="691" height="894"></a></div></div></div> Fri, 25 Apr 2025 15:03:34 -0500 Medicare Advantage CMS Issues Rate Announcement and Final Rule for CY 2026 Medicare Advantage, Prescription Drug Plans <div class="container"><div class="row"><div class="col-md-8">The Centers for Medicare &amp; Medicaid Services (CMS) earlier this month released its <a href="https://www.cms.gov/newsroom/press-releases/cms-finalizes-2026-payment-policy-updates-medicare-advantage-and-part-d-programs" target="_blank">rate announcement</a> and <a href="https://www.federalregister.gov/public-inspection/2025-06008/medicare-and-medicaid-programs-contract-year-2026-policy-and-technical-changes-to-the-medicare" target="_blank">final rule</a> on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly for contract year (CY) 2026. The rule confirms prior rulemaking regarding MA plan prior authorization determinations and strengthens provider and patient access to appeals processes related to concurrent medical reviews.However, the agency did not finalize a number of proposals and deferred others. Specifically, the final rule declines to finalize proposals related to health equity analysis on plan utilization management programs, guardrails on plan use of artificial intelligence in coverage determinations, and coverage for anti-obesity medications. The agency deferred action until future rulemaking on the following proposals:&nbsp;<ul><li>Enhanced rules on internal coverage criteria.</li><li>Additional Medicare Advantage Organizations (MAOs) marketing and communications controls.</li><li>Increased transparency requirements regarding MAO provider directories.</li><li>Behavioral health cost-sharing requirements.</li><li>Revised MAO medical loss ratio reporting and auditing processes.</li></ul>Overall, the agency increases payments to MAOs on average by 5.06% from 2025 to 2026. This is an increase of 2.83 percentage points since the CY 2026 Advance Notice, largely attributable to an increase in the effective growth rate, reflecting fee-for-service Medicare spending.<h2>AHA TAKE</h2>The AHA appreciates that CMS finalized changes to organizational determinations and appeal rights, which support greater transparency around health plan downgrades of the level of care, as well as reaffirmed its policies on prior authorizations. These important provisions will help safeguard Medicare Advantage (MA) enrollees’ ability to access medically necessary care. Simultaneously, the AHA looks forward to working with the administration to further advance policies that increase oversight of MA plans, and in particular, supports efforts to better ensure that all Medicare beneficiaries receive the same access to care, whether they are enrolled in an MAO or Traditional Medicare.For additional detail, the CMS fact sheets on the <a href="https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-rate-announcement" target="_blank">rate announcement</a> and <a href="https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription-final" target="_blank">policy and technical changes rule</a> summarize key provisions.<h2>HIGHLIGHTS OF THE FINAL RULE</h2>Organization Determinations and Appeal RightsCMS finalizes proposals to strengthen existing regulations regarding MA coverage and responsibility to provide all reasonable and necessary Medicare Parts A and B benefits. These include:<ul><li>Clarifying that an enrollee’s further liability to pay for services cannot be determined until an MAO has made a determination on a request for payment.</li><li>Modifying the definition of an organization determination to clarify that a coverage decision made by an MAO contemporaneously to when an enrollee is receiving such services, including level of care decisions (such as inpatient or outpatient coverage), is an organization determination subject to appeal and other existing requirements.</li><li>Finalizing a proposal to strengthen the notice requirements to ensure that a provider who has made a standard organization determination request on an enrollee’s behalf, or when it was otherwise appropriate, receives notice of the MAO’s decision.</li></ul>Honoring Prior Authorizations and Concurrent Medical Necessity DeterminationsThe final rule reinforces existing CMS policy that requires plans to adhere to medical necessity decisions rendered during a prior authorization process. The rule establishes that plans may only reconsider a previously approved prior authorization determination for obvious error or fraud. Additionally, as noted above, the rule explicitly extends this protection to concurrent determinations made pursuant to inpatient admissions.Medicare Prescription Payment PlanIn the final rule, CMS reiterates its requirement under the Inflation Reduction Act of 2022 (IRA) to establish a payment plan that would allow enrollees in Medicare Part D and MA plans with prescription drug coverage the ability to pay for their out-of-pocket drug costs monthly instead of requiring a single upfront payment. This option must be made available for Medicare Part D enrollees and those individuals enrolled in MA plans with prescription drug coverage beginning Jan. 1, 2025.Other Pharmacy-related ProvisionsThe final rule includes several additional pharmacy-related provisions, such as:<ul><li>Requiring that Part D sponsors’ network contracts with pharmacies mandate such pharmacies to be enrolled in the Medicare Drug Price Negotiation Program’s Medicare Transaction Facilitator Data Module.</li><li>Codifying provisions of the IRA that stipulate there is no cost-sharing or applicable deductible for an adult vaccine recommended by the Advisory Committee on Immunization Practices covered under Part D.</li><li>Codifying provisions of the IRA that stipulate the Part D cost-sharing amount for a one-month supply of covered insulin products must not exceed the proposed “covered insulin product applicable cost-sharing amount” and must not be subject to the Part D deductible.</li></ul><h2>POLICIES THAT THE AGENCY DID NOT FINALIZE</h2>Coverage of Anti-obesity MedicationsCMS does not move forward with a proposal to allow the coverage of anti-obesity medications that are indicated to reduce excess body weight and maintain long-term weight reduction in individuals who have been diagnosed with obesity. This regulation would have applied to such drugs covered under both Medicare Part D and Medicaid.Guardrails for Artificial IntelligenceThe agency does not adopt proposed guardrails for MAO utilization of artificial intelligence (AI) in coverage determinations. The proposal sought to ensure that MAOs continue to provide equitable access to services, irrespective of technological advances, by updating existing regulations to account for the use of AI and other automated systems. This includes clarifications that MAOs' use of AI or automated systems must comply with existing laws and regulations that prohibit discrimination against beneficiaries based on any factor related to health status or condition. Despite not finalizing the specific guardrails, the agency notes that AI usage remains important and will be the subject of future agency actions.Annual Health Equity Analysis of Utilization Management PoliciesThe rule explicitly does not finalize proposed changes that would have required MAO utilization management committees to conduct an annual health equity analysis of plan prior authorization usage by examining more granular data on specified metrics, such as the percentage of requests that were approved and the median amount of time plans spent in issuing a determination on prior authorization requests. As a result, the 2025 policies remain unchanged, which require such analyses to be conducted on aggregate data.<h2>POLICIES DEFERRED FOR FUTURE RULEMAKING</h2>MA Plan Utilization of Internal Coverage Criteria for Making Coverage DecisionsCMS defers a proposal that sought to clarify that all criteria not found within the CMS coverage determination rules were considered “internal” and were subject to applicable regulations. Additionally, the proposal would have created specific limitations on when plans could utilize internal criteria and specifically prohibited criteria that failed to provide a clinical benefit to the patient.&nbsp; &nbsp;Provider Directory Requirements and Inclusion in Medicare Plan FinderCMS defers a proposal to improve MAO provider directories for future rulemaking. The previous proposal would have required MA plans to report provider directory data to CMS for incorporation into the agency’s Medicare Plan Finder platform — an online resource designed to aid enrollees in selecting Medicare coverage. Furthermore, the rule would have required MAOs to attest to the accuracy of provider directory information. The agency also sought stakeholder input on the frequency with which plans should be required to attest to such accuracy, recognizing that provider directory and network information are subject to frequent updates and changes.Cost-sharing for Behavioral Health ServicesCMS defers for future rulemaking a proposal to improve access to behavioral health for enrollees by ensuring that in-network cost-sharing for behavioral health services is no greater than cost-sharing for those services in Traditional Medicare. When CMS proposed the changes to cost sharing for behavioral health services, the agency sought stakeholder comment on applying a possible transition period to implement the proposed cost-sharing standard for certain benefits.Marketing and Oversight of Agent and Broker ActivityCMS defers a proposal to add new requirements and oversight for MA agents and brokers for future rulemaking. The proposal sought to protect consumers from inappropriate, confusing or misleading marketing or communication materials.Medical Loss Ratio Reporting RequirementsThe final rule did not address proposed revisions to MA and Part D plan medical loss ratio (MLR) calculations. The proposed rule included a provision that, if finalized, would have required plans to submit detailed information on how a plan calculated the MLR, established additional restrictions on plan reporting of “quality improvement activities,” and established an MA MLR auditing process.&nbsp;&nbsp;Administration of Supplemental Benefits with Debit CardsCMS does not address the proposed new requirements governing the proper administration of supplemental benefits provided to enrollees through debit cards.<h2>HIGHLIGHTS OF THE RATE ANNOUNCEMENT</h2>Payments to MAOsPayments to MAOs will increase on average by 5.06% from 2025 to 2026. A significant component of the rate increase was driven by the effective growth rate — or increase in spending in Traditional Medicare, which was calculated at 9.04%. CMS estimates that the rate increase will mean an additional $25 billion in MA payments to MAOs in CY 2026.&nbsp; &nbsp;Removal of Medical Education CostsCMS finalizes, as proposed, the completion in CY 2026 of a three-year phase-in of a technical adjustment removing medical education costs from the historical and projected expenditures supporting the FFS costs included in the growth rate calculations. For CY 2026, CMS will apply 100% of the adjustment for MA-related medical education costs.Phase-in of Risk Adjustment Model ChangesIn 2026, CMS will complete a three-year phase-in of improvements to the MA risk adjustment model that was finalized in the CY 2024 Rate Announcement. The changes to the MA risk adjustment model include a reduction in the number of diagnosis codes included and changes in the weights of Hierarchical Condition Category demographic elements. CMS previously stated that the revised model will ensure risk adjustment payments better reflect the cost of care for beneficiaries and make the model less susceptible to discretionary coding on the part of corporate commercial plans.<h2>FURTHER QUESTIONS</h2>If you have further questions, please contact Noah Isserman, AHA’s director of health insurance and coverage policy, at <a href="mailto:nisserman@aha.org">nisserman@aha.org</a> or Terry Cunningham, AHA’s senior director of administrative simplification policy, at <a href="mailto:tcunningham@aha.org">tcunningham@aha.org</a>.</div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-issues-rate-announcement-and-final-rule-for-cy-2026-medicare-advantage-prescription-drug-plans-4-15-2025.pdf"><img src="/sites/default/files/2025-04/cover-cms-issues-rate-announcement-and-final-rule-for-cy-2026-medicare-advantage-prescription-drug-plans-advisory-4-15-2025-r.png" data-entity-uuid data-entity-type="file" alt="Cover Image of CMS Issues Rate Announcement and Final Rule for CY 2026 Medicare Advantage, Prescription Drug Plans Advisory" width="640" height="828"></a></div></div></div> Tue, 15 Apr 2025 12:17:47 -0500 Medicare Advantage CMS finalizes CY 2026 Medicare Advantage, Part D rates /news/news/2025-04-07-cms-finalizes-cy-2026-medicare-advantage-part-d-rates The Centers for Medicare &amp; Medicaid Services April 7 <a href="https://www.cms.gov/newsroom/press-releases/cms-finalizes-2026-payment-policy-updates-medicare-advantage-and-part-d-programs" target="_blank">released</a> finalized payment rates for calendar year 2026 Medicare Advantage and Part D plans. Payments to MA plans are projected to result in an increase of 5.06%, or more than $25 billion. This is an increase of 2.83% since the CY 2026 Advance Notice, which CMS attributes to an increase in the effective growth rate. The AHA is continuing to review the rate announcement and recent <a href="/news/headline/2025-04-04-cms-releases-final-rule-2026-medicare-advantage-prescription-drug-plans" target="_blank">policy rule</a> and will provide members with more information soon. Mon, 07 Apr 2025 18:20:15 -0500 Medicare Advantage CMS releases final rule for 2026 Medicare Advantage, prescription drug plans /news/headline/2025-04-04-cms-releases-final-rule-2026-medicare-advantage-prescription-drug-plans The Centers for Medicare &amp; Medicaid Services April 4 finalized <a href="https://www.federalregister.gov/public-inspection/2025-06008/medicare-and-medicaid-programs-contract-year-2026-policy-and-technical-changes-to-the-medicare">changes</a> to the Medicare Advantage and prescription drug programs for contract year 2026. The rule finalizes proposed clarifications requiring MA and Part D plans to honor medical necessity decisions rendered as part of a prior authorization process, closes loopholes in MA appeals processes by explicitly defining organizational determinations eligible for appeal, and codifies requirements designed to improve enrollee experience interacting with dual eligible special needs plans. The administration deferred finalizing several proposals until further rulemaking can occur, including provisions on plan use of proprietary/internal coverage criteria, additional plan directory requirements and behavioral health cost-sharing.&nbsp; &nbsp; Additionally, the rule finalizes proposals regarding vaccine and insulin cost-sharing for Part D plans and requires all Part D plans to require network pharmacies to be enrolled in the Medicare Drug Price Negotiation Program’s Medicare Transaction Facilitator Data Module.&nbsp; &nbsp; The AHA is continuing to review the rule and will provide members with more information soon.&nbsp; Fri, 04 Apr 2025 16:01:00 -0500 Medicare Advantage AHA discusses how Congress can improve support for post-acute care /news/headline/2025-03-11-aha-discusses-how-congress-can-improve-support-post-acute-care The AHA March 11 <a href="/testimony/2025-03-11-aha-statement-house-ways-and-means-subcommittee-health-hearing-march-11-2025">shared</a> ways Congress could better support patient access to post-acute care in comments for a <a href="https://waysandmeans.house.gov/event/health-subcommittee-hearing-on-after-the-hospital-ensuring-access-to-quality-post-acute-care/">hearing</a> held by the House Committee on Ways and Means Subcommittee on Health. The AHA urged Congress to rein in harmful practices by Medicare Advantage plans, repeal the minimum staffing rule and support investments in workforce development, among other actions. &nbsp; &nbsp; The association also highlighted the crucial role that each post-acute sector plays across the continuum of care and urged Congress to take steps to address some of the unique regulatory and policy challenges they face.&nbsp; Tue, 11 Mar 2025 16:03:23 -0500 Medicare Advantage AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 /testimony/2025-03-11-aha-statement-house-ways-and-means-subcommittee-health-hearing-march-11-2025 <div class="container"><div class="row"><div class="col-md-8"><h2>Statement of the �� Association for the Committee on Ways and Means Subcommittee on Health of the U.S. House of Representatives “After the Hospital: Ensuring Access to Quality Post-Acute Care” March 11, 2025</h2>On behalf of our nearly 5,000 member hospitals and health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and our 2,425 post-acute care members, the �� Association (AHA) appreciates the opportunity to submit this statement for the record to the Ways and Means Subcommittee on Health on the value of post-acute care and how Congress can better support patients’ access to these critical services.<h2>General Policy &amp; Regulatory Challenges</h2>Post-acute care is provided to patients who have been discharged from an acute-care hospital but still require services such as close medical supervision, nursing care, therapies and other support. Long-term care hospitals (LTCHs) act as a pressure relief valve for high-acuity patients needing extended hospital stays, thereby easing the burden on intensive care units (ICUs). Inpatient rehabilitation facilities (IRFs) assist patients recovering from life-changing illnesses like brain injuries, spinal cord injuries and amputations. Skilled nursing facilities (SNFs) offer rehabilitation therapy services aimed at strengthening patients and making them more independent before they return home. Home health agencies (HHs) enable seniors to remain independent by providing medical or non-medical care in their homes. Each of these facilities plays a crucial role across the continuum of care.While each specific post-acute sector faces unique challenges, there are several policy and regulatory issues that are universal.<h3>Medicare Advantage</h3>Medicare Advantage (MA) plans are an increasingly popular choice for older Americans, and measures must be taken to ensure that patients who require post-acute care services are able to access them in a timely manner. Perhaps the biggest challenge facing post-acute care providers and their patients is the ongoing restrictions that MA plans place on access to care. The issue has been well documented by providers as well as by Department of Health and Human Services Office of Inspector General and congressional investigations.<a href="#fn1">1</a>,<a href="#fn2">2</a> The prior authorization process used by MA plans places significant administrative burden on both acute-care hospitals and post-acute care providers. Perhaps more importantly, it is directly harmful to Medicare beneficiaries — at best delaying their care and at worst outright denying medically necessary treatment.MA plans’ practices have directly contributed to the growing discharge delay problems plaguing acute-care hospitals. While all beneficiaries have faced these delays, the increase in length of stay for MA beneficiaries seeking post-acute care has increased twice as much compared to Traditional Medicare beneficiaries. Specifically, the average length of stay (ALOS) prior to discharge to post-acute care settings has grown by 11.3% for MA patients between 2019 and 2024. However, for patients in Traditional Medicare, the ALOS has grown by only 5.2%, according to industry benchmark data from Strata Decision Technology, LLC.Despite steps taken by the Centers for Medicare &amp; Medicaid Services (CMS) in recent years, providers have seen little to no meaningful change in MA plan behavior and no increased access for beneficiaries. Additionally, post-acute care providers still face challenges with MA plans listing them within their networks. CMS should conduct regular audits to ensure that MA plans include robust post-acute care options with sufficient bed spaces and resources to provide the in-network care that patients need. As MA enrollment continues to grow, it is imperative that Congress continue to rein in these harmful practices to ensure that beneficiaries are not denied the care to which they are entitled.<h3>Ongoing Workforce Challenges</h3>The U.S. health care system is facing unprecedented workforce shortages, with the Bureau of Labor Statics estimating there will be 193,100 openings for nurses in each of the next 10 years.<a href="#fn3">3</a> For physicians, there could be a shortage of between 37,800 and 124,000 physicians by 2034 for both primary and specialty care.<a href="#fn4">4</a> Since mid-2020, post-acute care providers have seen a significant number of patient care technicians, registered nurses, and respiratory therapists, among other vital professionals, shifting employment to other organizations. Some post-acute care providers in rural areas have experienced significant challenges in filling open positions, sometimes going months without receiving an application for open registered nurses, licensed practical nurses, certified nursing assistants or key leadership roles. Staffing challenges jeopardize the ability of seniors to access the care they need and deserve.To ensure residents and families have access to high-quality care close to home, meaningful, long-term solutions and investments in workforce development must replace stop-gap measures, reimbursement cuts and punitive regulations. The AHA encourages Congress to pass the Conrad State 30 and Physician Access Reauthorization Act (S.709/H.R.1585) and the Healthcare Workforce Resilience Act, as well as support visa recapture initiatives and continue support for the Health Resources and Services Administration’s (HRSA) health professions and nursing workforce development programs.<h2>Sector Specific Comments</h2><h3>Long-Term Care Hospitals</h3>LTCHs play a unique role for Medicare and other beneficiaries by caring for the most severely ill patients who require extended hospitalization. LTCHs offer an intensive, hospital-level of care that may not be available in other post-acute care settings. LTCH patients are typically very medically complex, with multiple organ failures, and stay in LTCHs on average for at least 25 days. Many LTCH patients depend on ventilators due to respiratory failure or similar ailments, which require highly specialized care and extended stays. In addition, LTCHs are critical partners for acute-care hospitals, alleviating capacity for overburdened ICUs and other parts of the care continuum that would otherwise be further strained without access to LTCHs for these patients.In 2016, Congress put in place a dual-rate payment system under the LTCH prospective payment system (PPS) for Traditional Medicare beneficiaries.<a href="#fn5">5</a> This fundamental change in the payment system and other coinciding market factors dramatically reshaped the landscape of both LTCHs and the beneficiaries they serve. Since implementation of the dual-rate payment system, the volume of standard LTCH cases has fallen by approximately 70% from its peak under the legacy payment system and the number of LTCH providers also has decreased by 20%. At the same time, the average acuity of LTCH patients has risen by 20% or more in that same period, and these patients are increasingly consolidated into a limited number of Diagnosis-Related Groups (DRGs).<a href="#fn6">6</a> In addition, approximately one-third of all Medicare LTCH discharges nationally are paid the inpatient PPS-equivalent rate. However, these reimbursements fall well short of the cost of care. AHA’s analysis shows that as of fiscal year 2020 reimbursement for these cases totaled only 46% of the cost of care.<a href="#fn7">7</a> Finally, the growth of MA has further shrunk the patient population for LTCHs as MA plans routinely inappropriately deny access to LTCHs.The smaller, sicker patient population and dwindling reimbursement has created many challenges for LTCHs, as evidenced by the closure of so many of these facilities. The remaining patient pool is notably more acute and costly to treat, resulting in cases increasingly qualifying for high-cost outlier (HCO) payments to compensate for lack of precision in the DRGs as so many cases are consolidated into a limited number of DRGs. In 2016, the fixed-loss amount (FLA) for HCO cases, which is the amount of financial loss an LTCH must incur before qualifying for an HCO payment, was $16,423. Since that time, the FLA has risen by more than 300% to $77,048. This unsustainable figure puts LTCHs in the untenable position of having to lose tens of thousands of dollars in order to care for some of the sickest patients. Unfortunately, CMS has been unable to deviate from its current methodology to provide relief from this policy due to a congressional mandate to cap total outlier payments at 8% of total payments.<a href="#fn8">8</a>The AHA appreciates this Subcommittee’s awareness of the need to provide relief to the LTCH sector and supports efforts to provide additional flexibility and funding for HCO cases, and additional flexibility to provide care for different types of patients through the standard payment system.<h3>Inpatient Rehabilitation Facilities</h3>IRF patients are typically admitted directly from an acute-care hospital following a serious accident or illness such as stroke, brain injury, amputation or others that have resulted in serious functional deficits and medical complications. IRFs provide hospital-level care, which means they are closely supervised by a physician who also oversees patients’ overall rehabilitation. The intensive course of rehabilitation provided in IRFs must include a minimum of 15 hours per week of intensive therapy services involving multiple therapy disciplines, as well as around-the-clock specialized nursing care. This level of care is critical for debilitated patients who are stable enough to be discharged from the acute-care hospital to begin intensive rehabilitation but are at risk for medical complications without continued close medical management.The AHA continues to hear from IRFs regarding their concerns with CMS’ IRF Review Choice Demonstration (RCD). CMS initially created the IRF RCD to “assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud.” However, the agency never provided credible evidence to support its belief that there may be high rates of fraud in the IRF field — it only cited its improper payment rate for IRFs, which, as it knows, is not the same as fraud. Since being operationalized by the Biden administration in 2023, CMS has not subsequently provided any evidence that the IRF RCD has revealed or assisted in uncovering any fraud. Specifically, the demonstration currently subjects 100% of IRF claims to review in both Alabama and Pennsylvania. Yet, according to CMS’ <a href="https://www.cms.gov/files/document/irf-rcd-stats-fy-2024.pdf" target="_blank" title="CMS: Review Choice Demonstration for Inpatient Rehabilitation Facility Services (IRF RCD) Quarterly Updates. Fiscal Year 2024 (Oct 2023 – Sept 2024).">most recent data</a> collected during fiscal year 2024, approximately 90% of all claims reviewed have been approved. Of those, more than 95% were approved on the initial submission. Despite this high affirmation rate and lack of evidence of any fraud, CMS says it still plans to continue its expansion of the demonstration to more than half of all states and territories, subjecting hundreds of thousands of IRF claims annually to the burdensome manual medical review process. It has become clear that this demonstration is burdensome, diverts valuable clinical resources, and is not achieving its stated objective of uncovering or preventing fraud in the Medicare program.Therefore, the continued need for the IRF RCD remains highly dubious, and the AHA continues to encourage CMS and Congress to end this program.<h3>Skilled Nursing Facilities</h3>SNFs play another critical role for many hospitalized patients who need continued care after discharge. However, hospitals have faced increasing difficulty discharging patients to post-acute care settings, including SNFs. This challenge has largely been due to staffing shortages and the associated reduced capacity of SNFs and other providers. These shortfalls then place additional burden back on hospitals, including the need for hospitals to board patients until a discharge location can be found. Therefore, it is vital for the entire continuum of care, including for acute-care hospitals, that SNFs are properly resourced.The AHA and its members are committed to safe staffing to ensure high-quality, patient-centered care in all health care settings, including long-term care (LTC) facilities. Yet, the process of safely staffing any health care facility is about much more than achieving an arbitrary number set by regulation. It requires clinical judgment and flexibility to account for patient needs, facility characteristics, and the expertise and experience of the care team. The Biden administration’s one-size-fits-all minimum staffing rule for LTC facilities creates more problems than it solves and could jeopardize access to all types of care across the continuum, especially in rural and underserved communities that may not have the workforce levels to support these requirements.The AHA supports the Protecting America’s Seniors Access to Care Act (H.R. 1683) to prohibit the Department of Health and Human Services from implementing the provisions of the minimum staffing rule. We have recommended to CMS specific alternative strategies that take more patient- and workforce-centered approaches to ensuring LTC facilities have a strong foundation of policies and processes to continually assess, reassess and adjust their staffing levels. These strategies constitute starting points for further standards development, which we would encourage CMS to engage in with the assistance of patients and the entire health care continuum. Not only would these proposed alternatives support more timely and effective action by LTC facilities to address staffing challenges, but they also would be more consistent with modern clinical practice. Thus, repealing the Biden-era mandate would both protect patient access to care and allow for the development of more effective and clinically appropriate strategies to improve LTC patient outcomes.<h3>Home Health Agencies</h3>Approximately one in five hospitalized Medicare beneficiaries are discharged to HH.<a href="#fn9">9</a> These services alleviate pressure on hospitals, other post-acute care sites and caregivers, who would otherwise be responsible for these patients. HH agencies also can prevent rehospitalization by safely providing needed interventions at home thus avoiding potential complications and accidents.Over the last few years, the AHA has seen a strain on HH operations — along with other post-acute care providers — due to financial challenges, creating ripple effects throughout the continuum of care. Hospitals have seen the length of stay for patients being discharged to HH increase as they face increasing difficulty finding placements for these patients.<a href="#fn10">10</a> This has been due in large part to the reductions in reimbursement to HH providers put in place by CMS since its implementation of the new Medicare fee-for-service payment system in 2020. CMS determined it must permanently cut HH payments from between 4% to 8% annually in order to meet statutory budget neutrality requirements. In addition, CMS has indicated that it intends to recoup billions more in temporary reductions in the coming years. These payment reductions, paired with staffing shortages, and other administrative burdens and costs will continue to have serious implications for access to services for Medicare beneficiaries. The AHA is thankful for the Committee’s ongoing support of home health agencies.<h2>Conclusion</h2>Thank you for your leadership on these important issues and for the opportunity to provide comments. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.<hr><ol><li id="fn1">HHS, Office of Inspector General (OIG); Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (April 2022) (<a href="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf" target="_blank">https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf</a>).</li><li id="fn2"><a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a>.</li><li id="fn3">3<a href="https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6" target="_blank">https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6</a>.</li><li id="fn4">4<a href="https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage" target="_blank">https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage</a>.</li><li id="fn5">Bipartisan Budget Act Of 2013 (P.L. 113–67).</li><li id="fn6"><a href="/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries" target="_blank">/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries</a>.</li><li id="fn7"><a href="/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf" target="_blank">/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf</a>.</li><li id="fn8">Section 15009(b) of the 21ST Century Cures Act added section 1886(m)(7) to the Act.</li><li id="fn9">MedPAC; July 2024 Data Book; Section 8, Pg. 107 (<a href="https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf" target="_blank">https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf</a>).</li><li id="fn10"><a href="/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule" target="_blank">/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule</a>.</li></ol></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf" target="_blank" title="Click here to download the AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 PDF.">Download the Testimony PDF</a></div><a href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf"><img src="/sites/default/files/inline-images/Page-1-AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.png" data-entity-uuid="ef5df51a-efdf-417b-bd24-197ee16b5607" data-entity-type="file" alt="AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 page 1." width="695" height="900"></a></div></div></div> Tue, 11 Mar 2025 12:52:15 -0500 Medicare Advantage AHA report examines how growth of MA heightens challenges for rural hospitals /news/headline/2025-02-20-aha-report-examines-how-growth-ma-heightens-challenges-rural-hospitals A new AHA <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aha.org%2Fguidesreports%2Fgrowing-impact-medicare-advantage-rural-hospitals-across-america&amp;data=05%7C02%7Cngill%40aha.org%7Caef1ad770da34897ce8508dd51f346b4%7Cb9119340beb74e5e84b23cc18f7b36a6%7C0%7C0%7C638756827492910882%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=5KH6ru2XzRmAnYPP%2BtehJzl5v5xA5R89i2YjowSpf1M%3D&amp;reserved=0" target="_blank">report</a> highlights how certain practices by Medicare Advantage plans are increasing rural hospitals' vulnerabilities and threatening access to care in rural communities.&nbsp;&nbsp; &nbsp; The report reveals that rural hospitals are receiving only 90.6% of Traditional Medicare rates on a cost basis from MA plans. Quality of care is also affected, with 81% of rural clinicians reporting declines due to insurer requirements. Rural MA patients face longer hospital stays as well, spending 9.6% more time in the hospital before transitioning to post-acute care compared to similar Traditional Medicare patients. Administrative burdens have also grown, with nearly 4 in 5 rural clinicians reporting an increase in administrative tasks over the past five years, and 86% saying these demands have negatively impacted patient outcomes.&nbsp; &nbsp; “With MA plans accounting for more than half of total Medicare enrollment and growing, it’s more important than ever that the program works for patients and the providers who care for them,” <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aha.org%2Fpress-releases%2F2025-02-20-new-aha-report-shows-growing-pressure-medicare-advantage-rural-hospitals-ability-care-communities&amp;data=05%7C02%7Cngill%40aha.org%7Caef1ad770da34897ce8508dd51f346b4%7Cb9119340beb74e5e84b23cc18f7b36a6%7C0%7C0%7C638756827492925184%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=87Nt85lW4p8XOPe0ipefL6%2Fh0f6btzhUBlOxG7Hr92s%3D&amp;reserved=0" target="_blank">said</a>&nbsp;AHA President and CEO Rick Pollack. “It is critical for policymakers to address the harmful impact of Medicare Advantage’s low reimbursements and excessive administrative burdens to help ensure rural hospitals can continue to provide care to their patients and communities." Thu, 20 Feb 2025 15:19:41 -0600 Medicare Advantage New AHA Report Shows Growing Pressure of Medicare Advantage on Rural Hospitals’ Ability to Care for Communities /press-releases/2025-02-20-new-aha-report-shows-growing-pressure-medicare-advantage-rural-hospitals-ability-care-communities Contact:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sharon Cohen,&nbsp;<a class="ck-anchor" href="mailto:scohen@aha.org" id="mailto:scohen@aha.org">scohen@aha.org</a> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Colin Milligan,&nbsp;<a class="ck-anchor" href="mailto:cmilligan@aha.org" id="mailto:cmilligan@aha.org">cmilligan@aha.org</a>&nbsp;WASHINGTON (February 20, 2025) — The �� Association (AHA) today&nbsp;<a href="/growing-impact-medicare-advantage-rural-hospitals-across-america" target="_blank">released a report</a> that found rural hospitals face mounting challenges related to certain Medicare Advantage (MA) insurance plans that are affecting patient care and their sustainability as a critical health care provider.Over 100 rural hospitals have closed or converted to other provider types in the last decade, and according to Dobson DaVanzo &amp; Associates, 429 rural hospitals are at a high financial risk. One of the emerging pressures has been increased enrollment in MA plans, many of which reimburse hospitals below cost, delay or deny crucial payments, and impose onerous and unnecessary administrative burdens that prevent or delay patients from receiving needed care or being discharged to appropriate post-acute care settings.“With MA plans accounting for more than half of total Medicare enrollment and growing, it’s more important than ever that the program works for patients and the providers who care for them,” said AHA President and CEO Rick Pollack.&nbsp;“It is critical for policymakers to address the harmful impact of Medicare Advantage’s low reimbursements and excessive administrative burdens to help ensure rural hospitals can continue to provide care to their patients and communities.”The AHA report, “<a href="/growing-impact-medicare-advantage-rural-hospitals-across-america" target="_blank">The Growing Impact of Medicare Advantage on Rural Hospitals Across America</a>,” found that the program impacts rural hospitals in three significant ways: reimbursement; access to care and quality; and administrative and care costs.<ul><li>MA plans reimburse rural providers on average 10% less than Traditional Medicare, relative to costs. Rural hospitals with special designations, such as Medicare Dependent Hospitals and Low-Volume Hospitals, receive 15% less. Even critical access hospitals (CAHs), which are reimbursed by Traditional Medicare based on the cost of care, received only 95% of Traditional Medicare rates from MA plans, according to industry benchmark data provided by Strata Decision Technology, LLC. This can result in effectively undermining the intent of the CAH program.</li><li>MA patients stay nearly 10% longer in rural hospitals before discharge to medically necessary post-acute care settings compared to clinically similar Traditional Medicare patients because of policies or inadequate networks that delay discharge to appropriate settings of care.</li><li>Nearly 4 in 5 rural clinicians report significant increases in administrative tasks, such as prior authorizations, over the past five years, with 86% reporting negative patient impacts.&nbsp;The 24% growth in MA prior authorization requests from 2019 to 2023 is delaying and in some cases denying patients the medically necessary, timely care their providers prescribed.</li></ul>In response to the findings, the AHA report identifies six ways to improve MA: (1) streamline the prior authorization process, (2) require MA plans to offer cost-based reimbursement to critical access hospitals, (3) deliver prompt payment, (4) provide transparency in coverage denials, (5) improve data collection to ensure adequate oversight, and (6) ensure health plans have enough care providers participating in their networks to meet the needs of their communities.&nbsp;<a href="/growing-impact-medicare-advantage-rural-hospitals-across-america" target="_blank">Read the full report on AHA’s website</a>.&nbsp;###About the �� Association (AHA) The �� Association (AHA) is a not-for-profit association of health care provider organizations and individuals that are committed to the health improvement of their communities. The AHA advocates on behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners – including more than 270,000 affiliated physicians, 2 million nurses and other caregivers – and the 43,000 health care leaders who belong to our professional membership groups. Founded in 1898, the AHA provides insight and education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at&nbsp;<a href="/">www.aha.org</a>.&nbsp; Thu, 20 Feb 2025 12:24:20 -0600 Medicare Advantage AHA Releases Report on Medicare Advantage’s Growing Impact on Rural Hospitals <div class="container"><div class="row"><div class="col-md-8">The AHA today is releasing The Growing Impact of Medicare Advantage on Rural Hospitals Across America, a <a href="/growing-impact-medicare-advantage-rural-hospitals-across-america" target="_blank" title="The Growing Impact of Medicare Advantage on Rural Hospitals Across America Report PDF">report</a> that explores how certain Medicare Advantage (MA) plans’ practices exacerbate rural hospitals’ vulnerability and threaten health care for rural communities.The report’s key findings include:<ul><li>MA plans reimburse rural providers on average 10% less than Traditional Medicare, relative to costs. Rural hospitals with special designations, such as Medicare Dependent Hospitals and Low-Volume Hospitals, receive 15% less. Even critical access hospitals (CAHs), which are reimbursed by Traditional Medicare based on the cost of care, received only 95% of Traditional Medicare rates from MA plans, according to industry benchmark data provided by Strata Decision Technology, LLC. This can result in effectively undermining the intent of the CAH program.</li><li>MA patients stay nearly 10% longer in rural hospitals before discharge to medically necessary post-acute care settings compared to clinically similar Traditional Medicare patients because of policies or inadequate networks that delay discharge to appropriate settings of care.</li><li>Nearly 4 in 5 rural clinicians report significant increases in administrative tasks, such as prior authorizations, over the past five years, with 86% reporting negative patient impacts. The 24% growth in MA prior authorization requests from 2019 to 2023 is delaying and, in some cases, denying patients the medically necessary, timely care their providers prescribed.</li></ul>In response to the findings, the AHA report identifies six ways to improve MA: (1) streamline the prior authorization process, (2) require MA plans to offer cost-based reimbursement to critical access hospitals, (3) deliver prompt payment, (4) provide transparency in coverage denials, (5) improve data collection to ensure adequate oversight, and (6) ensure health plans have enough care providers participating in their networks to meet the needs of their communities.<h2>RESOURCES</h2><ul><li>Report: <a href="/growing-impact-medicare-advantage-rural-hospitals-across-america" target="_blank">The Growing Impact of Medicare Advantage on Rural Hospitals Across America</a>.</li><li><a href="/press-releases/2025-02-19-new-aha-report-shows-growing-pressure-medicare-advantage-rural-hospitals-ability-care-communities" target="_blank" title="Report Press Release">Press Release</a> on the report.</li><li>Fact Sheet: <a href="/fact-sheets/2024-08-09-fact-sheet-improving-access-care-medicare-advantage-beneficiaries" target="_blank" title="Fact Sheet">Improving Access to Care for Medicare Advantage Beneficiaries</a>.</li><li>AHA’s <a href="/type/health-plan-accountability-update" target="_blank" title="AHA Health Care Plan Accountability Update">Health Care Plan Accountability Update</a>.</li></ul><h2>FURTHER QUESTIONS</h2>If you have further questions, please contact AHA at 800-424-4301.&nbsp; &nbsp;</div><div class="col-md-4"><a href="/system/files/media/file/2025/02/aha-releases-report-on-medicare-advantages-growing-impact-on-rural-hospitals-bulletin-2-20-2024.pdf"><img src="/sites/default/files/inline-images/cover-aha-releases-report-on-medicare-advantages-growing-impact-on-rural-hospitals-bulletin-2-20-2025_1.png" data-entity-uuid="8e12f081-33e4-4743-9974-717110d7aa87" data-entity-type="file" alt="Report PDF" width="679" height="878"></a></div></div></div> Thu, 20 Feb 2025 12:09:54 -0600 Medicare Advantage The Growing Impact of Medicare Advantage on Rural Hospitals Across America /guidesreports/growing-impact-medicare-advantage-rural-hospitals-across-america <div class="raw-html-embed"> /* for the replacement of bullets */ ul.ArrowRed, ul.ArrowBlue { list-style: none; /* Remove default bullets */ padding-left: 25px; } ul.ArrowRed li, ul.ArrowBlue li { margin-bottom: 7px; line-height: 1.5em; } ul.ArrowRed li::before, ul.ArrowBlue li::before{ content: "➨"; font-size: 1.5em; margin-right: 5px; display: inline-block; height: 12px; width: 12px; position: relative; top: 3px; font-weight: 700px; } ul.ArrowRed li::before, ul.ArrowRed strong{ color: #9d2235; } ul.ArrowBlue li::before, ul.ArrowBlue strong{ color: #307fe2; } ul.ArrowRed li, ul.ArrowBlue li { padding-left: 15px; text-indent: -15px; } ul.ArrowBlue strong{ color: #307fe2; } strong sup{ color: #9d2235; } </div><div class="container"><div class="row"><div class="col-md-9"><h2>Executive Summary</h2>Rural hospitals play a vital role in the health and economic stability of their communities, serving as lifelines for care and major local employers. However, these hospitals face &nbsp;mounting financial pressures that jeopardize their ability to provide essential &nbsp;services.<img src="/sites/default/files/inline-images/image_44.png" data-entity-uuid="a4d7696f-9efe-4d3a-992d-ab3558613bff" data-entity-type="file" width="293" height="333" class="align-right"><ul class="ArrowRed"><li>The Medicare Advantage (MA) program has expanded rapidly and now accounts for more than half of total Medicare enrollment. While MA offers some benefits, certain plans reimburse hospitals below cost, delay or deny payments, and impose significant administrative hurdles, especially to rural hospitals, which have seen the fastest growth in MA recently. These risks exacerbate existing challenges like staffing shortages and unfavorable payer mixes. Over 100 rural hospitals have closed or converted to other provider types in the last decade, and according to Dobson DaVanzo &amp; Associates, LLC, 429 rural hospitals are at high financial risk.1 Addressing the impact of MA on rural hospital finances is critical to safeguarding care access for millions of Americans in underserved areas.</li></ul>This report explores how certain MA plans’ practices exacerbate rural hospitals’ vulnerability and threaten health care access for rural communities. Here are the report’s key findings:<ul class="ArrowBlue"><li>Reimbursement well below the cost of care:&nbsp;Traditional Medicare often pays less than the cost of care, and increasingly rural hospitals report that MA plans pay even less — only 90.6% of Traditional Medicare rates on a cost basis, according to industry benchmark data provided by Strata Decision Technology, LLC (see chart).</li><li>Diminished access to quality care: Delays, denials, and excessive prior authorization from certain MA plans can hinder timely care: 81% of rural clinicians report quality reductions due to insurer requirements, and MA patients face 9.6% longer stays before post-acute care compared to similar Traditional Medicare patients.</li><li>Administrative burdens and payment challenges:&nbsp;Delayed or denied MA payments worsen rural hospitals’ finances and increase administrative burdens. Nearly 4 in 5 rural clinicians report higher administrative tasks in five years, with 86% seeing negative impacts to patient outcomes.</li></ul>Medicare enrollees will continue to choose MA plans and, as enrollment grows, it is ever more important that the program works both for the enrollee and the providers who care for them. Unsustainable reimbursement rates and administrative burdens strain these hospitals’ ability to deliver critical care in underserved areas. Meaningful oversight and reform are needed to ensure rural hospitals receive fair, timely reimbursement and can continue delivering high-quality care to their communities.<h2>Introduction</h2>Hospitals and health systems play a vital role in supporting the health and well-being of rural communities across the United States. They also serve as key economic drivers, creating jobs and stimulating local economic growth. Despite their critical importance, rural hospitals face a host of financial challenges that threaten access to care for the 46 million Americans living in rural areas.2&nbsp; Many of these difficulties have been well documented, including staffing shortages, low patient volumes and heavy reliance on payers that reimburse below the cost of care.3 Less recognized, however, is the impact of the rapid expansion of Medicare Advantage (MA) plans and the impact of certain MA practices on rural hospitals. Based on both quantitative and qualitative analyses, including interviews with rural hospital leaders, this report finds that the practices used by some MA plans pose several distinct risks to rural communities:<ul class="ArrowRed"><li>Reimbursement well below the cost of care: Traditional Medicare is broadly recognized as paying below the cost of care.4 Increasingly, rural hospitals report that MA plans pay even less. Industry benchmark data provided by Strata Decision Technology, LLC shows that MA plans reimburse rural hospitals at just 90.6% of Traditional Medicare rates on a cost basis.</li><li>Diminished access to quality care: Excessive insurer delays and denials of care as well as cumbersome prior authorization requirements from certain MA plans interfere with clinicians’ ability to provide timely and effective care. For example, 81% of rural clinicians report reduced quality of care due to insurer requirements, and MA patients experience longer lengths of stay — 9.6% longer on average before discharge to post-acute care — compared to clinically-similar Traditional Medicare patients.</li><li>Administrative burdens and payment challenges: Delayed or denied payments by certain MA plans compound financial difficulties for rural hospitals, including by adding substantial administrative costs. Nearly 4 in 5 rural clinicians report significant increases in administrative tasks over the past five years, with 86% reporting this leading to negative impacts on patient outcomes.5</li></ul>Each of these challenges disproportionately strain rural hospitals with limited resources and persistent staffing shortages. Rural hospitals already contend with a challenging payer mix as they disproportionately serve older, sicker patients who are more likely to be covered by Medicare or Medicaid — programs that typically reimburse well below the cost of care. Facing MA’s below-cost reimbursements, many rural hospitals may lack the leverage to negotiate better rates with large, national insurers, leaving them forced to accept unsustainable contracts.Ultimately, growth in MA enrollment is compounding the financial pressure on rural hospitals, which are already struggling to stay afloat.6&nbsp; Over 100 rural hospitals have closed or converted to other provider types in the last decade, and according to Dobson DaVanzo &amp; Associates, LLC, 429 rural hospitals are at high financial risk.7 Meanwhile, MA enrollment in rural areas has surged, quadrupling since 2010.8 At its current growth rate, MA enrollment is projected to surpass half of all rural Medicare enrollment by this year.9Given the growing presence of MA plans in rural communities, meaningful reforms are needed to ensure fair and timely reimbursement and reduce the excessive administrative burden on rural providers. Without these changes, this added financial pressure may force more rural hospitals to cut services or close altogether, further limiting health care access in already underserved communities.<h2>The Rise of MA and Associated Challenges for Rural Hospitals</h2>Over the past decade, total MA enrollment in the U.S. has surged by 120%, increasing from 15 million beneficiaries in 2014 to 33 million in 2024 — or 54% of total Medicare enrollment. The Congressional Budget Office (CBO) projects that by 2034, MA will cover 64% of all Medicare beneficiaries.10<img src="/sites/default/files/inline-images/image_41.png" data-entity-uuid="e00bff56-8d0c-41cd-b082-0f87075ef2a5" data-entity-type="file" width="557" height="463" class="align-left"> In rural areas, MA penetration has reached or exceeded 50% of the Medicare market in an increasing number of counties.11,12 Nationwide, the proportion of hospitals with more MA inpatient days than Traditional Medicare inpatient days nearly tripled over a five-year period ending in 2023. This shift is more striking in rural hospitals, where the share grew by more than tenfold (see Figure 1).For rural hospitals, the share of MA inpatient days as a proportion of all Medicare inpatient days more than doubled over that same period (105.7%), outpacing the 56% growth seen across all hospitals (see Figure 2).13&nbsp;<img src="/sites/default/files/inline-images/image_42.png" data-entity-uuid="e9f40aff-6603-45fd-8497-4b004a09387b" data-entity-type="file" width="425" height="501" class="align-left">The growth of MA enrollment in rural areas can be attributed to several factors. Broadly, many beneficiaries may choose to enroll in an MA plan to receive supplemental benefits, such as cost-sharing protections (e.g., out-of-pocket maximum limits) and/ or medical benefits (e.g., vision, hearing and dental), that are not available under Traditional Medicare. In other cases, employers may offer MA plans as a retirement benefit with the same insurer as used for individuals’ employer-sponsored coverage, helping promote continuity of care. Furthermore, in 2020, the Centers for Medicare &amp; Medicaid Services (CMS) issued regulatory changes that loosened network adequacy standards for MA plans in rural areas, with further flexibilities provided to rural MA plans that included certain types of telehealth providers in their networks. These changes helped increase the number of MA plans with compliant networks in rural areas and led to an expanded number of MA plan options for rural beneficiaries.However, this rapid expansion has left stakeholders and policymakers grappling with its implications for the health care system. Several concerns have already emerged regarding the practices of certain MA plans. Investigations have revealed that these plans frequently use claim denials, prior authorization requirements and other administrative tactics that delay or deny care to patients, which in turn delays and denies payments to hospitals.14 Inadequate reimbursement for services that these plans do cover further compounds hospital losses. &nbsp;<h2>MA’s Eroding Payments to Rural Hospitals</h2>Many MA plans reimburse hospitals, including those in rural areas, at lower rates than Traditional Medicare, which already pays below the cost of care. An AHA analysis using industry benchmark data provided by Strata Decision Technology, LLC found that in 2023 MA plans reimbursed rural hospitals at just 90.6% of Traditional Medicare rates on a cost basis (see Figure 3).&nbsp;<img src="/sites/default/files/inline-images/image_43.png" data-entity-uuid="357a20c4-a198-4c00-b166-4965e70ded05" data-entity-type="file" width="578" height="509" class="align-left">These lower payment-to-cost ratios can be attributed to both higher non-clinical costs associated with treating MA patients (due in part, for example, to longer lengths of stay for MA enrollees as a result of post-acute care prior authorization delays) and lower reimbursement rates. An AHA analysis of hospital prices using price transparency data from Turquoise Health15 found that average MA rates for common Medicare Severity Diagnosis Related Groups (MS-DRGs) fell between 91% and 94.5% of hospital-specific Traditional Medicare rates (see Table 1). And the trend is worse for certain types of rural hospitals. For example, in 2023, Medicare dependent and low-volume hospitals received average MA rates amounting to just 85% of what they would have received under Traditional Medicare, according to industry benchmark data provided by Strata Decision Technology, LLC. Even critical access hospitals (CAHs), which are reimbursed by Traditional Medicare based on the cost of care, received only 95% of Traditional Medicare rates from MA plans on a cost basis, according to industry benchmark data provided by Strata Decision Technology, LLC. This can result in effectively undermining the intent of the CAH program. Overall, the AHA estimates that this lack of payment parity cost rural hospitals over $1 billion in 2023. Those losses are only expected to climb.<img src="/sites/default/files/inline-images/image_31.png" data-entity-uuid="e6206f59-9844-4a6d-a06c-1b9f7b88e837" data-entity-type="file" alt="Image of Table 1" width="1284" height="423">The implications of this payment disparity are far reaching. Rural hospitals rely more heavily on total Medicare revenues to maintain their operations. While Medicare made up 37% of total hospital revenues nationwide in 2023, it accounted for 43% of revenues for rural hospitals.16 Consequently, rural hospitals are more reliant on revenues from MA than ever before. In fact, over the last five years, MA revenues as a share of total Medicare revenues have grown from 11.4% to 17.6%.17<img src="/sites/default/files/inline-images/image_38.png" data-entity-uuid="ddbe4996-80ed-4b21-8904-8396c22d91b9" data-entity-type="file" width="1276" height="835"><h2>Administrative Burden Impacts on Costs and Patient Access to Care in Rural Communities</h2><div>Adding to these financial strains, rural hospitals are grappling with increasing administrative burdens driven by the operational practices of certain MA plans. For example, a Kaiser Family Foundation report found that prior authorization requests in MA surged to nearly 50 million in 2023, a 43.9% increase from 2020.18 And despite these authorizations, hospitals face increasing care denials and withheld payments for essential care.19 For rural hospitals that often operate with limited staffing, technology <img src="/sites/default/files/inline-images/image_34.png" data-entity-uuid="493086e2-2917-4bf1-91dd-007d64bf7cc3" data-entity-type="file" width="331" height="180" class="align-right">and other resources, these practices present substantial challenges to their workflow and budgets, while patients face delays and uncertainty in receiving timely care.</div>Care delays often mean increased costs for hospitals and health systems, particularly when plans prevent hospitals and health systems from discharging patients in a timely manner to the next site of care. A recent report by the Senate Permanent Subcommittee on Investigations found that certain MA plans disproportionately targeted post-acute care facilities with claim denials and prior authorization requirements.20 In fact, an AHA analysis of industry benchmark data provided by Strata Decision Technology, LLC revealed that in 2024, rural hospital patients covered by MA plans experienced an average length of stay 9.6% longer prior to discharge to a post-acute care setting compared to those covered by Traditional Medicare (see Figure 4). This represents a 46% growth in the difference in average length of stay for MA patients relative to Traditional Medicare between 2019 and 2024.<img src="/sites/default/files/inline-images/image_35.png" data-entity-uuid="eeb616fa-d5a3-4e07-bdb2-cb18614309c4" data-entity-type="file" alt="Figure 4 image" width="758" height="462"> Care delays and denials also can have a cascading effect on health outcomes for patients. A recent AHA survey conducted by Morning Consult found that 81% of clinicians practicing in rural communities reported reductions in quality of care to patients as a result of insurer administrative requirements. Sadly, MA enrollees experience a disproportionate number of these delays. A Commonwealth Fund survey found that 22% of MA enrollees experienced care delays due to prior authorization, nearly double the rate for Traditional Medicare (13%).21 Similarly, a 2022 Health and Human Services Office of Inspector General report revealed that MA plans inappropriately denied up to 85,000 prior authorization requests in 2019 and rejected nearly 20% of reimbursement claims that met Medicare coverage rules.22&nbsp; These inappropriate denials also impose a staggering financial toll on hospitals, which collectively spend an estimated $20 billion annually contesting health plan denials.23In addition, these administrative burdens also weigh heavily on hospitals’ staff — the nurses, physicians, therapists, financial counselors and others — exacerbating burnout and diminishing the quality of care. This burden ultimately makes it more challenging for rural hospitals to staff these positions. The same AHA survey conducted by Morning Consult found that nearly 4 in 5 clinicians in rural communities report increases in insurer-required administrative tasks over the past five years, with over half describing this burden as high or extremely high. Alarmingly, 86% noted negative impacts on patient outcomes. Such findings underscore the human cost of administrative burden, where increasing operational challenges directly undermine the mission of rural hospitals to deliver timely and effective care to their communities.<img src="/sites/default/files/inline-images/image_37.png" data-entity-uuid="5c2d2729-54e1-42cc-b698-f3b4a2f92258" data-entity-type="file" alt="Case Study Image Challenges of certain MA Plans on Patient Care at Great Plains Health" width="1277" height="985"><h2>Conclusion</h2>Medicare enrollees will continue to choose MA plans and, as enrollment grows, it is ever more important that the program works both for the enrollee and the providers who care for them. The growing presence of MA plans in rural communities presents significant challenges for rural hospitals. As MA plans reimburse rural hospitals at unsustainable rates and impose administrative hurdles, they continue to strain hospitals’ ability to provide critical services in underserved areas. Meaningful oversight and reform are needed to ensure rural hospitals receive fair, timely reimbursement and can continue delivering highquality care to their communities.In response, several bipartisan bills have been introduced to better regulate MA prior authorization processes and alleviate the arduous paperwork burden placed on hospitals serving MA patients. Additionally, a CMS rule clarified “clinical criteria guidelines to ensure people with MA receive access to the same medically necessary care they would receive in Traditional Medicare.” However, hospitals have noted little improvement since the rule’s finalization in January.24<h2>Here are several AHA recommendations:</h2><ol><li>Streamline prior authorization processes to protect timely access to medical care and drugs covered under the medical benefit. To accomplish this, the AHA supports the Improving Seniors’ Timely Access to Care Act, which would streamline prior authorization requirements in MA. The bill would make significant progress toward reducing complexity and promoting uniformity in prior authorization processes and requirements that frustrate both patients and providers. Additionally, the bill would significantly increase the specificity of prior authorization data reported by plans, which will give the Department of Health and Human Services greater insight into problematic plan processes and enable more targeted enforcement of policies designed to protect patient access to necessary care. The legislation also would apply provisions that streamline prior authorization to clinic-administered drugs covered under the medical benefit, such as injections typically used to treat cancer and other complex diseases.</li><li>Cost-based reimbursement for CAHs from MA plans. Congress created a special statutory payment designation for CAHs in recognition of the unique role they play in preserving access to health care services in rural areas. As the MA program is growing rapidly in rural communities, this important financial protection is being eroded. Indeed, a greater portion of a CAH’s revenue is subject to negotiation with MA plans that often result in below-cost payment terms and involve onerous plan requirements that contribute to administrative burden, unnecessary delays and denials in approving and paying for patient care, as well as additional strains on the health care workforce. The AHA supports legislation to ensure CAHs receive cost-based reimbursement for MA patients.</li><li>Ensure prompt payment from insurers for medically necessary, covered health care services delivered to patients. The AHA supports policies that would require timely payment to providers to ensure they have the resources they need to pay staff and acquire the supplies to care for patients.</li><li>Require MA plan clinician reviewers who review coverage denials (adverse determinations) to provide their name and credentials and attest they meet existing CMS rules and have relevant training and expertise in the requested service. As health plans play an important role in patient care through their coverage policies, it is important that patients’ clinicians and regulators know who is making determinations that impact whether a patient can access the medically necessary care they need in a timely manner.</li><li>Improve data collection, reporting and transparency in the MA program with a focus on metrics that are meaningful indicators of patient access, such as appeals, grievances and denials.&nbsp;These data will provide patients, state and federal regulators, and other stakeholders with the information necessary to hold health plans accountable for meeting their obligations to beneficiaries. These data could be used, for example, to target for audits those plans with inappropriate or questionable practices and identify and apply penalties to health plans that are noncompliant with federal rules.</li><li>Expand network adequacy requirements for certain post-acute sites of care. To help mitigate the cost of caring for patients ready for discharge to post-acute care but who face health plan authorization delays, MA plans should be required to explicitly cover services in all post-acute sites of care. Specifically, inpatient rehabilitation facilities, long-term care hospitals and home health agencies25 should be added to MA network adequacy requirements and standards should be adopted to ensure there are a sufficient number and type of each PAC facility in MA networks.</li></ol>End Notes: .NoLinkColor a{ color: #333; text-decoration: none; } .NoLinkColor a:hover{ color: #003087; } <div class="NoLinkColor">____________________________________________________________ 1 <a href="https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/" target="_blank">https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/</a>2 &nbsp;<a href="https://www.ers.usda.gov/topics/rural-economy-population/rural-classifications/what-is-rural#:~:text=In%202020%2C%20 46%20million%20people,percent%20of%20the%20U.S.%20population" target="_blank">https://www.ers.usda.gov/topics/rural-economy-population/rural-classifications/what-is-rural#:~:text=In%202020%2C%2046%20million%20people,percent%20of%20the%20U.S.%20population</a>3 &nbsp;<a href="/2022-09-07-rural-hospital-closures-threaten-access" target="_blank">/2022-09-07-rural-hospital-closures-threaten-access</a>&nbsp;4 &nbsp;<a href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC-3.pdf " target="_blank">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC-3.pdf</a>5 &nbsp;This poll was conducted by Morning Consult on behalf of the �� Association (AHA) between October 30 – November 15, 2024, among a sample of 1,001 clinicians.6 <a href="/system/files/media/file/2022/09/rural-hospital-closures-threaten-access-report.pdf" target="_blank">/system/files/media/file/2022/09/rural-hospital-closures-threaten-access-report.pdf</a>7 <a href="https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/">https://strengthenhealthcare.org/new-report-finds-integration-with-a-hospital-system-can-protect-rural-hospitals-patient-access-to-care/</a>8 &nbsp;<a href="https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-plan-availability-and-premiums-in-rural-areas/" target="_blank">https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-plan-availability-and-premiums-in-rural-areas/</a>9 &nbsp;<a href="https://rupri.public-health.uiowa.edu/publications/policybriefs/2025/2024%20MA%20Enrollment%20Update.pdf">https://rupri.public-health.uiowa.edu/publications/policybriefs/2025/2024%20MA%20Enrollment%20Update.pdf</a>10 <a href="https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/" target="_blank">https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/</a>&nbsp;11 <a href="https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/">https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/</a>12 <a href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC.pdf" target="_blank">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_MedPAC_Report_To_Congress_SEC.pdf</a>&nbsp;13 AHA analysis of Medicare Cost Report data between FY 2018 and FY 2023.&nbsp;14 <a href="https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raise-concerns-about-beneficiary-access-to-medically-necessary-care/" target="_blank">https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raiseconcerns-about-beneficiary-access-to-medically-necessary-care/</a>&nbsp;15 The views and opinions expressed reflect only the AHA’s sentiment and do not necessarily reflect the official position of Turquoise Health.&nbsp;16 AHA analysis of AHA Annual Survey data from 2023.&nbsp;17 AHA analysis of AHA Annual Survey data between 2019 and 2023.&nbsp;18 <a href="https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/" target="_blank">https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/&nbsp;</a>19 <a class="ck-anchor" href="https://www.nbcnews.com/health/rejecting-claims-medicare-advantage-rural-hospitals-rcna121012" id="https://www.nbcnews.com/health/rejecting-claims-medicare-advantage-rural-hospitals-rcna121012">https://www.nbcnews.com/health/rejecting-claims-medicare-advantage-rural-hospitals-rcna121012</a>20 <a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a>&nbsp;21 <a href="https://www.commonwealthfund.org/publications/surveys/2024/feb/what-do-medicare-beneficiaries-value-about-their-coverage" target="_blank">https://www.commonwealthfund.org/publications/surveys/2024/feb/what-do-medicare-beneficiaries-value-about-their-coverage</a>&nbsp;22 <a href="https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raise-concerns-about-beneficiary-access-to-medically-necessary-care/" target="_blank">https://oig.hhs.gov/reports/all/2022/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raiseconcerns-about-beneficiary-access-to-medically-necessary-care/</a>&nbsp;23 <a href="https://premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimate-medical-claims" target="_blank">https://premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimatemedical-claims</a>&nbsp;24 <a href="https://www.beckershospitalreview.com/finance/unnecessary-medicare-advantage-denials-harming-louisiana-patientscrowding- our-emergency-departments-and-costing-u-s-providers-billions.html" target="_blank">https://www.beckershospitalreview.com/finance/unnecessary-medicare-advantage-denials-harming-louisiana-patientscrowding-our-emergency-departments-and-costing-u-s-providers-billions.html</a>&nbsp;25 Skilled nursing facilities are already included in MA plan network adequacy requirements. &nbsp;</div></div><div class="col-md-3">&nbsp;&nbsp;<a class="btn btn-wide btn-primary" href="/press-releases/2025-02-19-new-aha-report-shows-growing-pressure-medicare-advantage-rural-hospitals-ability-care-communities" target="_blank" title="Click here to view the Press Release: New AHA Report Shows Growing Pressure of Medicare Advantage on Rural Hospitals’ Ability to Care for Communities.">View the Report Press Release</a><a href="/system/files/media/file/2025/02/growing-impact-of-medicare-advantage-on-rural-hospitals.pdf"><img src="/sites/default/files/inline-images/cover-medicare-advantage-in-rural-hospitals.png" data-entity-uuid="fcf92c40-00fd-48bc-8a6a-9a6c3dddb78f" data-entity-type="file" alt="Image of report cover." width="653" height="845"></a><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/02/growing-impact-of-medicare-advantage-on-rural-hospitals.pdf" target="_blank" title="Click here to download the Report: The Growing Impact of Medicare Advantage on Rural Hospitals Across America PDF.">Download the Report PDF</a></div></div></div> Wed, 19 Feb 2025 13:46:46 -0600 Medicare Advantage