Health systems are forging partnerships with certain Medicare Advantage plans, even as increasingly frequent battles over reimbursement rates and pay policies cause them to break ties with others.
Disputes over pay rates, claim denial policies and care quality benchmarks have led some health systems to drop out of Medicare Advantage networks. However, health systems are willing to partner with certain Medicare Advantage plans that disclose reasonable claim denial and prior authorization processes, invest in MA-tailored joint ventures and renegotiate reimbursement rates, system executives said.
Related: Why Medicare Advantage plans are losing more providers
Providers have a growing financial stake in Medicare Advantage as more of the aging population chooses health plans that feature provider networks in exchange for extra benefits not offered in traditional Medicare.
The 32.8 million Americans enrolled in Medicare Advantage in 2024 represent a two-fold increase over the last decade, according to data from the Centers for Medicare and Medicaid Services. The $462 billion spent on those beneficiaries this year has nearly tripled since 2014, data from the Congressional Budget Office shows.
Sutter Health CEO Warner Thomas said health systems and insurers need to work together and providers should diversify revenue beyond traditional fee-for-service payments. Thomas said Sutter, based in Sacramento, California, is in the early stages of setting up strategic partnerships with Medicare Advantage plans but didn't share additional details.
Health systems like Sutter and Hackensack Meridian Health are preparing for continued growth in Medicare Advantage through such partnerships. Hackensack formed a Medicare Advantage joint venture with Horizon Blue Cross Blue Shield of New Jersey called Braven Health in 2020.
The 18-hospital system based in Edison, New Jersey, has a 35% ownership stake in the venture, while RWJBarnabas Health in West Orange, New Jersey, has a 10% interest and Horizon has a 55% stake. Horizon manages the claims processing, provider complaints and other administrative tasks for the statewide 48,000-member Medicare Advantage plan, while Hackensack oversees care management for select members. The joint venture's payment model includes value-based contracts that reward providers for hitting quality metrics.
Braven exceeded the Healthcare Effectiveness Data and Information Set national benchmark for controlling hemoglobin levels among diabetes patients in 2023, although it hasn’t met the national benchmark for certain measures such as flu shot rates for seniors and colorectal cancer screening rates.
“MA is going to continue to grow, I know there have been hiccups lately,” Hackensack CEO Robert Garrett said. “This joint venture is a good way to align incentives. We think we’re poised for tremendous growth across the state.”
A Blue Cross Blue Shield Association spokesperson also touted the insurer's work with other healthcare organizations, including Anthem BCBS of Virginia's partnership with Bethesda, Maryland-based Aledade, which helps manage independent primary care clinics. The value-based care partnership includes Medicaid and commercial patients, as well as those with Medicare Advantage coverage.
However, these partnerships only work if there is mutual trust, transparency and respect between providers and insurers, said Michelle Lindsley, vice president for managed care for Memorial Hermann Health System in Houston.
"If improvement in administrative and operational conflicts and challenges can be achieved, there is a great opportunity to work together," she said.
Sioux Falls, South Dakota-based Sanford Health and MUSC Health in Charleston, South Carolina, will both end their respective contracts with Humana Medicare Advantage plans effective Dec. 31.
But Sanford contracts with about a dozen other Medicare Advantage plans, including with Blue Cross and Blue Shield of Minnesota, Medica and HealthPartners. MUSC Health also has other contracts in place with several insurers.
MUSC Health CEO Dr. Patrick Cawley said new MA plans are coming on to the market, and lowering the cost of care is a team effort.
"That’s something we’d love to work together on. I’d love to take on shared risk,” Cawley said.
Nick Olson, executive vice president and chief financial officer at Sanford Health, said the system is carefully choosing Medicare Advantage plans.
“It’s really about, ‘What do we need in a partnership that constantly puts the patient at the center?’” said Olson. “Is there some abrasion that we’re constantly working through? Absolutely. Does that mean that we don’t feel like we can get to a point of rectifying that? We feel like we can, and that’s why we continue to work with [insurers].”
Sanford is ending its contract with Humana largely due to high rates of coverage denials and care delays, according to Olson. Humana and AHIP did respond to requests for comment.
However, Sanford's affiliated health plan, which offers Medicare Advantage and other types of coverage, has achieved denial rates well below the national average and whittled down care authorization turnaround times to less than a day, Olson said. He said that's possible with external health plan partners, as well.
Olson said Sanford looks for partners that understand patients in a rural healthcare setting and ones that use denials and prior authorizations sparingly. Sanford typically has stronger relationships with regional health plans, Olson said. The health system often meets with insurers on a monthly or quarterly basis to maintain strong, long-term relationships, he said.
“I value the relationships that are willing to come and understand, look us in the eye, have us look them in the eye, and have that common bond of, ‘What is it going to take to make this successful?’” Olson said.
