Insurers Warn of Risks as Rural Hospitals Drop Medicare Plans

Rural hospitals facing financial headwinds and frustrated with prior authorization demands are withdrawing from contracts with Medicare Advantage plans, prompting concerns from insurers that the cancellations could have consequences for patients.

Over 25 hospitals across the country have decided to pull out of some or all of their Medicare Advantage contracts since Jan. 1. Industry groups such as the American Hospital Association cite MA’s lower reimbursement, more aggressive prior authorization, and increased administrative demands when compared with traditional Medicare as reasons behind the contract closures.

The cancellations follow a marked expansion by Medicare Advantage insurers into rural communities after ...