Q3 2024 Provider-Payer Dispute Data Update: More Unsuccessful Negotiations within Medicare Advantage Leading to Gaps in Patient Care
As Medicare’s Open Enrollment period begins and Election Day approaches, both presidential candidates are presenting their plans to address key health policy issues, including Medicaid and the future of the Affordable Care Act (ACA). Earlier this month, Vice President Kamala Harris (D) proposed expanding Medicare’s home care coverage for seniors,[1] while former president Trump’s (R) campaign has remained more elusive on his plans to reform or replace the ACA.[2] Against the backdrop of a neck-and-neck presidential race and the uncertainty surrounding the future composition of Congress, payers and providers continue to navigate a shifting policy landscape that could have significant implications on the factors contributing to more challenging contract negotiations and a rising number of disputes.
For nearly three years, FTI Consulting has been closely monitoring disputes between payers and providers through publicly reported news coverage and paid and earned media. Increasingly, payers and providers are facing greater challenges in reaching agreements related to reimbursement rates, quality improvement, care/disease management, and other contractual terms that impact coverage for millions of individuals and families across the United States. These disputes frequently draw attention from third-party players, including state and federal lawmakers, regulators, and local government officials.
While Q1 to Q3 2023 data revealed a notable surge in media coverage of payer-provider rate negotiations compared to the same period in 2022, Q3 2024 has seen the most pronounced spike in disputes made public since FTI Consulting started collecting this data.[3]
What we found: In Q3 2024, the number of disputes covered by traditional media reached 37—the highest since Q1 2022 and nearly double that of the previous quarter, potentially threatening access to medical care for hundreds of thousands of patients, especially those enrolled in Medicare Advantage plans.
Q3 2024 Healthcare Quarter in Review
- In Q3 2024, 12 out of 37 disputes failed to reach a timely agreement—one of the highest number of unresolved negotiations to date. While this proportion is similar to previous quarters, such as Q4 2023, it reflects a potential shift in the willingness of payers and providers to be flexible with rates, creating health insurance gaps for hundreds of thousands of patients across the country.
- Of the total disputes made public in Q3, 51%, or 19 out of 37, disputes involved Medicare Advantage (MA) plans. While this proportion was lower than what we observed in Q2 2024, this quarter saw the highest number of disputes involving MA plans to date.
OON = Out of Network
We observed that more and more hospitals and health systems are choosing to discontinue contracting with any MA plans, citing cost and administrative challenges associated with providing care to seniors enrolled in private managed care plans. While MA premiums are projected to decrease slightly in 2025 due to new policies aimed at reducing prescription drug costs,[4] the Centers for Medicare and Medicaid Services (CMS) is predicting growth in enrollment for these plans.[5]
At the same time, major insurers are scaling back their MA plans for 2025, requiring seniors to find new coverage based on their coverage preferences.[6] These competing levers are likely to create additional strains on payers and providers during open enrollment and in plan year 2025.
Disruptions in care due to unsuccessful negotiations have also sparked a slew of patient stories reported in traditional media outlets.[7] As awareness of the adverse consequences on patient care grows, payers and providers may experience more external pressure from local, state, and federal government agencies and legislators to ensure that rate negotiations minimize harm to patients.
The election will likely influence whether these disputes are a policy priority for regulators and Congress, and it is highly possible that we will continue to see increasing reimbursement rate disputes between payers and providers.
Research Methodology:
FTI Consulting searched multiple news databases for articles regarding negotiations over reimbursement rates between provider organizations and insurance companies. Those negotiations, which were publicly reported by a news outlet on July 1 or later, were counted for the quarter in which they were publicly reported. Negotiations that were resolved or failed to reach an agreement in one quarter but were first reported in another quarter were counted for the quarter in which they became public. Where providers no longer accept any Medicare Advantage plans, FTI Consulting has counted that decision as a single dispute.
Related Practices
[1] Tricia Neuman, Alice Burns, and Robin Rudowitz, “Vice President Harris’ Proposal to Broaden Medicare Coverage of Home Care,” Kaiser Family Foundation (October 11, 2024), https://www.kff.org/medicare/issue-brief/vice-president-harris-proposal-to-broaden-medicare-coverage-of-home-care/
[2] Berkeley Lovelace Jr., “After years of threats, Trump still doesn’t have a plan to replace Obamacare,” NBC News (September 11, 2024), https://www.nbcnews.com/health/health-news/debate-trump-health-care-plan-replace-obamacare-rcna170665
[3] Citseko Staples Miller, Annika Chauhan, “Q2 2024 Update: Medicare Advantage: An Increasing Number of Disputes Between Payers and Providers,” FTI Consulting, Inc. (July 11, 2024), https://fticommunications.com/q2-2024-update-medicare-advantage-an-increasing-number-of-disputes-between-payers-and-providers/
[4] Robert King, “Medicare Advantage, drug plan premiums to remain stable in 2025,” POLITICO Pro. (September 27, 2024), https://fticommunications.com/q2-2024-update-medicare-advantage-an-increasing-number-of-disputes-between-payers-and-providers/
[5] Meredith Freed, Jeannie Fuglesten Biniek, Anthony Damico, and Tricia Neuman, “Medicare Advantage in 2024: Enrollment Update and Key Trends,” Kaiser Family Foundation (August 8, 2024), https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/
[6] Maya Goldman, “Medicare Advantage retreat could squeeze seniors,” Axios (October 3, 2024), https://www.axios.com/2024/10/03/medicare-advantage-plans-2025-beneficiaries
[7] Scott Fallon, “NJ man had surgery as hospital, insurer disputed contract. Then he got a $25K bill,” NorthJersey.com (September 10, 2024), https://www.northjersey.com/story/news/health/2024/09/10/nj-man-charged-25k-as-hospital-insurer-disputed-contract/75069279007/
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