End of Year Update: Payer-Provider Disputes in the Public Eye in 2023
The healthcare sector experienced a myriad of changes and challenges in 2023, including the growing threat of cybersecurity incidents,[1] the winding down of COVID-19 public health emergency policies,[2] and an increasing number of mergers and acquisitions in privately held healthcare and life sciences companies.[3] These items, coupled with the ongoing workforce shortages, increasing healthcare and operational costs, and inflation, have created a complex, dynamic environment for stakeholders across the health sector to navigate.
The past year also brought a marked increase in payer-provider disputes, gaining media coverage by local, regional, state and national news outlets.[4],[5],[6]
Over the last two years, FTI Consulting has been closely tracking how negotiations between payers and providers over reimbursement rates and other contract terms have been unfolding in the public through news coverage, paid and earned media, and the response from local officials, state and federal lawmakers, and regulators.
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Over two years, our research has found a steady increase in media coverage of payer-provider rate negotiations, with significant year-over-year increases from 2022 to 2023.[7],[8] Notably, as we have previously reported, Medicare Advantage (MA) has increasingly been at the center of contract disputes between payers and providers in 2023with some health systems choosing to terminate all contracts with MA plans.[9],[10],[11]
What We Found: 2023 brought a significant increase in media coverage of reimbursement rate negotiations compared to 2022[12]
- In 2023, at least 86 disputes became public and were covered in the media, compared to only 51 in 2022 – a 69% increase.
- Coverage of disputes in 2023 was spread across 34 states, compared to 24 states during 2022.
- 44% of the disputes covered by the media in 2023 failed to reach an agreement, placing hundreds of thousands of patients out-of-network for some period of time. Similarly, in 2022, 45% of disputes failed to reach a timely agreement.
*OON = Out Of Network, Source: FTI Consulting, Inc.
Spotlight on Medicare Advantage
- Of 86 disputes reported in the media in 2023, 59% (51 disputes) – involved MA plans, and 12 were exclusively focused on MA plans.
- Similarly, in 2022, 29 of 51 disputes (56%) reported in the media involved MA plans, with eight disputes exclusively involving MA plans.
*MA = Medicare Advantage, Source: FTI Consulting, Inc.
While the percentage of disputes resulting in patients losing coverage for some period of time has remained steady year-over-year, the increase in media coverage of these disputes demonstrates that the issue is gaining increased attention among media and news outlets, industry trades, and government officials and regulators. A number of disputes that began in 2023 are approaching out-of-network deadlines in Q1 2024, and we fully expect media attention on these high-stakes and sensitive disputes to continue throughout 2024.
Q4 Healthcare
Quarter in Review
Research Methodology:
FTI Consulting searched multiple news databases for articles regarding negotiations over reimbursement rates between provider organizations and insurance companies. Those negotiations publicly reported by a news outlet on January 1, 2023, or later were counted for 2023. Negotiations that were resolved or failed to reach an agreement in 2023 but were first reported in 2022 were counted for 2022. Where providers no longer accept any Medicare Advantage plans, FTI Consulting has counted that decision as a single dispute.
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
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[1] Lauren Crawford Shaver, Robert D. Stanislaro, Jim Polson, Jamie Singer, Ben Herskowitz, James Condon, Jacqui Wilmot, Cady Hoffman, Ronelle Green, “Bipharma in 2024: At a Crossroads,” FTI Consulting, Inc. (December 8, 2023), https://fticommunications.com/2024-healthcare-life-sciences-industry-outlook-biopharma-at-crossroads/.
[2] Lauren Crawford Shaver, Citseko Staples Miller, Sophia Setterberg, Paula Gutierrez, “Breaking Through the Noise: How Managed Care Organizations Can Help Protect Medicaid Coverage,” FTI Consulting, Inc. (March 31, 2023), https://www.fticonsulting.com/insights/articles/breaking-through-noise-how-managed-care-organizations-help-protect-medicaid-coverage.
[3] “Healthcare Private Equity,” FTI Consulting, Inc. https://www.fticonsulting.com/industries/healthcare/healthcare-private-equity.
[4] Adam Broder, Citseko Staples Miller, Sophia Setterberg, Michael Adeyanju, Nicole Labkoff, Merzulie Gregoire, Paula Gutierrez, “Media Coverage of Payer-Provider Disputes Jumps 260% in Q1,” FTI Consulting, Inc. (May 1, 2023), https://fticommunications.com/media-coverage-of-payer-provider-disputes-jumps-260-in-q1/?topic_origin=healthcare-life-sciences.
[5] Adam Broder, Citseko Staples Miller, Paula Gutierrez, “Local News Outlets Continue to Highlight Increasingly Common Payer-Provider Disputes,” FTI Consulting, Inc. (July 25, 2023), https://fticommunications.com/local-news-outlets-continue-to-highlight-increasingly-common-payer-provider-disputes/.
[6] Adam Broder, Citseko Staples Miller, Paula Gutierrez, “Q3 Update: Medicare Advantage Under the Spotlight in Payer-Provider Disputes, “ FTI Consulting, Inc. (October 25, 2023), https://fticommunications.com/q3-update-medicare-advantage-under-the-spotlight-in-payer-provider-disputes/.
[7] See supra note 4.
[8] See supra note 5.
[9] See supra note 6.
[10] Jakob Emerson, “Hospitals are dropping Medicare Advantage left and right,” Becker’s Hospital Review (October 9, 2023), https://www.beckershospitalreview.com/finance/hospitals-are-dropping-medicare-advantage-left-and-right.html.
[11] Nona Tepper, “How rural hospitals are fighting Medicare Advantage,” Modern Healthcare (September 11, 2023), https://www.modernhealthcare.com/insurance/rural-hospitals-medicare-advantage.
[12] See supra notes 4-6.
