Medicare Advantage: In-Network vs. Out-of-Network

Medicare Advantage plans continue their unabated growth; in 2019, plan options across the United States have grown by 20% from 3,100 plans in 2018 to 3,700 plans in 2019.  By 2025, it is expected that Medicare Advantage market saturation will reach 50% of the Medicare-eligible population.

With unprecedented growth in these plans also comes increasing administrative challenges and roadblocks.  These range from never-ending record requests to non-Medicare claims payment methodology to lack of operational oversight on these issues.

As stewards of their communities; most healthcare facilities automatically participate in the health plans being sold in their markets.  In light of the increasingly challenging administrative burdens, it’s critical for healthcare facilities to seriously consider “Why Should I Contract for Medicare Advantage?”  In making a determination for in vs out of network participation; some of the key points worth considering are:

• Type of Medicare Advantage Products in Your Market: what is the product saturation in your market?
  • PPO: In & Out of Network Benefits
  • HMO: No Out of Network Benefits
  • PFFS: No Network Offered; Benefit Level Identical at Any Service Location
• Plan Design: can enrollees see you out of network with no negative financial impact?
• Network Reimbursement:
  • Out-of-network services reimburse at Medicare rates using underlying Medicare methodology
  • In-network services reimburse at contracted rate using methodology developed by the health plan; some key differences noted in plan design:
    • Extensive recoupments
    • Non-Medicare methodology:
      • What are covered services?
      • Length of stay limitations
      • Sub-Medicare rate methodology
      • No alignment with CMS rate methodology; i.e. paying home health under per diem reimbursement methodology
• Record Requests: Under CMS’s methodology for paying Medicare Advantage plans, health plans are laser focused on risk adjustment leading to a never-ending stream of onerous record requests. In an out-of-network position; there is no requirement to comply with these record requests.

It’s critical for managed care departments to weigh the benefits of being in-network with a Medicare Advantage plan and if that benefit outweighs the administrative burden.

Learn more about our managed care contracting services and how we can help.