Why Medicare Advantage contract negotiations are getting heated

Payers and providers are increasingly butting heads over Medicare Advantage contracts, with some health systems opting to go out-of-network.

There has been a “spike” in contentious negotiations since 2022, as providers and payers struggle to manage rising costs, according to Citseko Staples Miller, managing director and leader of the healthcare and life sciences public affairs team at FTI Consulting, which tracks provider-payer negotiations.

For years, providers have demanded higher reimbursements to address workforce shortages, rising labor costs and increasing administrative expenses. Now, due in part to pandemic-induced inflation, some providers have reached a breaking point, leading them to sever ties with specific plans.

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