Local News Outlets Continue to Highlight Increasingly Common Payer-Provider Disputes
The operational and financial landscape for healthcare organizations is as complex as ever, as payers and providers continue to tackle inflation, workforce challenges, increasing drug prices, and higher rates of utilization of healthcare services post-Covid.
New research estimates that healthcare costs could increase by seven percent in 2024,[1] complicating cost containment efforts and exacerbating negotiations between payers and providers on reimbursement rates, payment, and other contractual matters.
FTI Consulting has been closely tracking how these negotiations play out in the public through news coverage, paid and earned media, and the response from local officials, state and federal lawmakers, and regulators. As we have written before, the first quarter of 2023 saw a 260 percent increase in payer-provider rate negotiations covered by news organizations, compared to Q1 2022.[2] The second quarter of the year is proving to be no different.
What we found: The increased media coverage on reimbursement rate negotiations observed in Q1 2023 has continued through the second quarter, putting more patients on edge that they could lose access to their providers, hospitals, and health systems.
- In the first half of 2023, at least 41 disputes have been covered in the media, compared to only 15 in the first half of 2022, representing a 173 percent increase.
- In Q2 2023, there was a 130 percent increase in the number of new disputes covered by the media, compared to Q2 2022.
- Coverage of disputes in the first half of 2023 was spread across 25 states, compared to just 10 states in the first half of 2022.
- Nearly a third of the disputes covered by the media in the first half of 2023 have already failed to reach a timely agreement, placing hundreds of thousands of patients out-of-network for some period of time this year.
Data current as of July 13, 2023. “OON” stands for “Out of Network.”
Given the factors identified above, we expect the upward trend in disputes and failures to come to timely agreements to continue through the end of the year. Further, ahead of the Summer and Fall open enrollment period, we expect these disputes to disrupt individuals and families when trying to make informed decisions about their health plan coverage options in 2024. We expect media organizations to increase their coverage and anticipate greater policymaker scrutiny of these disputes, especially given their impact on patients.
Healthcare organizations looking to renegotiate contracts should prepare well in advance for multiple scenarios, including the increasingly likely scenario of going out-of-network. Please see our previous publication[3] on preparing your organization ahead of rate negotiations, and contact us with any questions.
A note on 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.
[1] “Medical cost trend: Behind the numbers 2024,” PwC Health Research Institute, (June 2023), https://www.pwc.com/us/en/industries/health-industries/library/behind-the-numbers.html
[2] Adam Broder, Citseko Staple Miller, Sophia Setterberg, Michael Adeyanju, Nicole Labkoff, Merzulie Gregoire and Paula Gutierrez, “Media Coverage of Payer-Provider Disputes Jumps 260% in Q1,” FTI Consulting, Inc., Strategic Communications (May 1, 2023), https://fticommunications.com/media-coverage-of-payer-provider-disputes-jumps-260-in-q1/?topic_origin=healthcare-life-sciences
[3] Adam Broder, Citseko Staples Miller and Nicole Labkoff, “5 Takeaways: Preparing Your Organization for Rate Negotiations,” FTI Consulting, Inc., Strategic Communications (May 16, 2022), https://fticommunications.com/5-takeaways-preparing-your-organization-for-rate-negotiations/
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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