After hearing reports from health systems about decreasing revenue capture from Medicare Advantage (MA) plans, this graphic dives into some of the trends driving this costly challenge providers are facing. MA plans’ popularity has swelled in recent years as seniors are drawn to the extra benefits and lower out-of-pocket costs. As a result, MA enrollees as a share of total inpatient days roughly doubled across all area types between 2015 and 2022. This trend has likely continued as MA penetration has only grown since 2022. This shift has been tough for providers because most MA plans require prior authorization for certain kinds of care, a burnout-driving and costly administrative demand for providers. Although the number of prior authorizations per MA enrollee has remained stable over recent years, providers are seeing more MA patients, leading to an increased burden. On top of that, the overall prior authorization denial rate jumped to 7.4% in 2022, after hovering around 5.7% for several years prior. These decisions can be overturned, but patients and providers often don’t file appeals, leading to higher rates of uncompensated care and lost revenues for providers. Unfortunately, these higher costs have brought many providers to a breaking point in contract negotiations with MA plans, leading to care disruptions that ultimately hurt patients the most.
