Jason Bleak runs Battle Mountain General Hospital, a small facility in a remote Nevada gold mining town that he described as 鈥渙ut here in the middle of nowhere.鈥
When several representatives from private health insurance companies called on him a few years ago to offer Medicare Advantage plan contracts so their enrollees could use his hospital, Bleak sent them away.
鈥淐ome back to the table with a better offer,鈥 the chief executive recalled telling them. The representatives haven鈥檛 returned.
Battle Mountain is in north-central Nevada about a three-hour drive from Reno, and four hours from Salt Lake City. Bleak suspects insurance companies simply haven鈥檛 enrolled enough of the area鈥檚 seniors to need his hospital in their network.
Medicare Advantage insurers are private companies that contract with the federal government to provide Medicare benefits to seniors in place of traditional Medicare. The plans have become dubious payers for and small hospitals, which report the insurers are often slow to pay or don鈥檛 pay.
Private plans now cover more than half of all those eligible for Medicare. And while enrollment is highest in metropolitan areas, it has increased . Meanwhile, more than since 2010, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina. Largely rural states such as Texas, Tennessee, and Georgia have had the most closures.
Medicare Advantage growth has had an outsize impact on the finances of small, rural hospitals that Medicare has designated as 鈥.鈥 Under the designation, government-administered Medicare pays extra to those hospitals to compensate for low patient volumes. Medicare Advantage plans, on the other hand, offer negotiated rates that hospital operators say often don鈥檛 match those of traditional Medicare.
鈥淚t’s happening across the country,鈥 said Carrie Cochran-McClain, chief policy officer of the National Rural Health Association, whose members include small-town hospitals.
鈥淒epending on the level of Medicare Advantage penetration in individual communities, some facilities are seeing a significant portion of their traditional Medicare patient or beneficiary move into Medicare Advantage,鈥 Cochran-McClain said.
Kelly Adams is the CEO of Mesa View Regional Hospital, another rural hospital in Nevada. He said he applauds Battle Mountain鈥檚 Bleak for keeping Medicare Advantage plans out of his hospital 鈥渁s long as he has.鈥
Mesa View, which is a little more than an hour鈥檚 drive east of Las Vegas, has a high percentage of patients enrolled in Medicare Advantage plans.
鈥淎m I going to say I鈥檓 not going to take care of 40% of our patients at the hospital or the clinic?鈥 Adams said, adding that it would be a 鈥渢ough deal鈥 to be forced to reject patients because they didn鈥檛 have traditional Medicare.
Mesa View has 21 Medicare Advantage contracts with multiple insurance companies. Adams said he has trouble getting the plans to pay for care the hospital has provided. They are either 鈥渟low pay or no pay,鈥 he said.
In all, the plans owe Mesa View more than $800,000 for care already provided. Mesa View lost about $1.3 million taking care of patients, according to its most recent annual cost report.
NRHA鈥檚 Cochran-McClain said the growth in the plans also narrows options for patients because 鈥渢he contracting that is happening under Medicare Advantage frequently has an influence on steering patients to specific types of providers.鈥 If a hospital or provider does not contract with a Medicare Advantage plan, then a patient may have to pay for out-of-network care. That generally wouldn鈥檛 happen with traditional Medicare, which is widely accepted.
At Mesa View, patients must drive to Utah to find nursing homes and rehabilitation facilities covered by their Medicare Advantage plans.
鈥淥ur local nursing homes are not taking Medicare Advantage patients because they don鈥檛 get paid. But if you鈥檙e straight Medicare, they鈥檇 be happy to take that patient,鈥 Adams said.
David Allen, a spokesperson for AHIP, an industry trade group formerly known as America鈥檚 Health Insurance Plans, declined to respond to Bleak鈥檚 and Adams鈥 specific concerns. Instead, he said enrollees are signing on because the plans 鈥渁re more efficient, more cost-effective, and deliver better value than original Medicare.鈥
Centers for Medicare & Medicaid Services press secretary Sara Lonardo said CMS has acted to ensure 鈥渢hat private insurance companies are held accountable for providing quality coverage and care.鈥
The reach of private Medicare Advantage plans varies widely in rural areas, said Keith Mueller, director of the Rural Policy Research Institute at the University of Iowa College of Public Health. If recent trends continue, enrollment could tip to 50% of all rural Medicare beneficiaries in about three years 鈥 with some regions like the Upper Midwest already higher than 50% and others lower, such as Nevada and the Mountain States, but trending upward.
In June, a bipartisan group of Congress members, led by Sen. Sherrod Brown (D-Ohio), urging federal agencies to do more to force Medicare Advantage insurers to pay health systems what they owe for patient care.
In an August response, CMS Administrator Chiquita Brooks-LaSure wrote that a final rule issued in April made 鈥渋mpactful changes鈥 to speed up care and address concerns about prior authorization 鈥 when a hospital and patient must get advance permission for care to ensure it will be covered by an insurer. Brooks-LaSure noted another proposed rule that, once finalized, could mandate that insurers provide specific reasons for denying care within seven days.
Hospital operators Adams and Bleak also want more federal action, and fast.
Bleak at Battle Mountain said he knows Medicare Advantage plans will eventually move into his area and he will have to contract with them.
鈥淭he question is,鈥 Bleak said, 鈥渉ow can we match the reimbursement so that we can sustain and keep our hospitals in these rural areas viable and strong?鈥
