Rural Hospitals Face Crisis Over Medicare Advantage Viability

Rural hospitals in the U.S. are expressing concerns about their ability to continue working with Medicare Advantage companies due to lower reimbursement rates compared to traditional Medicare. Leaders like Jason Merkley, CEO of Brookings Health System in South Dakota, have reported that these financial pressures could lead to layoffs and cuts in services, prompting some hospitals to terminate contracts with private insurers. The situation is exacerbated by issues such as payment delays and difficulties in authorizing patient care under these plans. While 56% of urban Medicare recipients are enrolled in private plans, only 47% of rural recipients are, although the presence of Medicare Advantage is growing in rural areas. Hospitals fear that dropping these contracts could leave patients without in-network providers, forcing them to change their coverage. The ongoing dialogue among hospital executives underscores the urgent need for sustainable solutions to address the financial viability of rural healthcare services.