AHA encourages MedPAC to refine analysis of MA enrollment impacts on patients, providers

The AHA Oct. 3 responded to the Medicare Payment Advisory Commission’s recent analysis on the financial impacts of Medicare Advantage enrollment growth on hospitals, which found that increased enrollment is not statistically associated, on average, with all-payer hospital margins. The AHA disagreed with the assessment and highlighted how certain MA plans create barriers to care access and provider payment. The AHA discussed how increases in MA claim denials and prior authorization determinations, as well as longer patient stays due to care delays caused by health plan administrative requirements — among other factors — lead to increased administrative burden on hospitals.

“Furthermore, relying solely on all-payer margin as a measure of hospital financial health risks overlooking how MA penetration uniquely affects hospitals,” the AHA wrote. “Organizations that track hospital financial performance, such as credit rating agencies, routinely supplement margin analysis with metrics including days cash on hand and debt service coverage, recognizing that hospital resilience depends on more than operating margin. More importantly, however, focusing on all-payer profit margin as an aggregate metric can obscure the financial pressures imposed by MA plans’ administrative practices and reimbursement structures, particularly in hospitals with high or growing MA enrollment.”

The AHA urged MedPAC to continue its analysis but to refine its analytic approach to address the association’s concerns.