Medicare Advantage 2024 Outlook

If you have been following the IHBS newsletters, you will know IHBS has had Medicare Advantage plans on our radar for sometime. However, if you are new to The Independent Physician, here is a brief history. Medicare Advantage plans hit the market at a tremendous pace. At first glance, they appeared to be similar to Medicare and with the promise of new patients, many providers signed contracts. As the spark of these newly inked contracts started to fade, providers began to see that along with these contracts came new burden on practices. All of a sudden, practices needed to obtain authorizations and referrals on items previously allowed on traditional Medicare.

New Medicare Advantage payers to the market were also having trouble in this new landscape. Unfortunately, as the years went by many of them filed for bankruptcy leaving providers with unpaid claims. It appeared that the smaller players couldn’t handle the heat, while the Medicare Advantage plans attached to large established commercial payers seemed to weather the storm… Or did they?

Fast forward to 2023, and once again there is a storm brewing underneath the surface that IHBS is keeping a close eye on. The overall trend with these plans has been higher denial rates resulting in payment lags and larger operating costs on practices. What’s interesting about the current state of affairs is that the trend is not clearly posted in mainstream news but it can be uncovered if you are following the breadcrumbs being dropped.

The first breadcrumb was the announcement that Medicare will be auditing Medicare Advantage plans with Risk Adjustment Audits. These audits were being performed to address overpayments by Medicare to Medicare Advantage Plans. Breadcrumb two is when large payers began to note a potential risk to investors in quarterly reports. For example, Humana lists these audits under their cautionary statement to investors in their most recent Q3 2023 earnings release online. Breadcrumb three came in September 2023 when Humana decided to sue HHS over these audits. Breadcrumb four also came in September 2023 when United Healthcare announced it will be trimming some of its Medicare Advantage Business line in 2024. Finally, the last bread crumb was dropped just this week that Cigna is looking to sell its Medicare Advantage line.

While I was planning on sending this Medicare Advantage outlook newsletter in December 2023, with the most recent Cigna news, I thought sooner was better. So, if you are a provider taking these plans, what do you do? I would advise watching these plans closely in 2024 to ensure you are being paid timely. I do not expect these Medicare Advantage plans to cripple these large payers but I do foresee a shakeup happening in 2024. With Medicare closely monitoring Medicare Advantage plans for appropriate plan construction, risk adjustment audits and marketing rules it will be interesting to see how many players stay in the game. Who knows, we may even see a reversal of some of these plans back to traditional Medicare.

As you know, IHBS will be monitoring this situation closely so make sure to stay tuned to future newsletters. If you feel other providers may benefit from this information, please feel free to forward this newsletter and ask that they subscribe. They can do so by clinking the link below.

Skyler Fierro, CEO

Innovative Healthcare Business Solutions

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