The 2025 Omniscient Health Physician Medicare Income Report confirms what physicians have been saying: Insurers offering Medicare Advantage HMOs and PPOs pay doctors and hospitals as much as 15 percent less than traditional Medicare, the government-administered Medicare program, reports Susan Morse for HealthcareFinanceNews.
As it is, the government’s Medicare provider rates are significantly lower than commercial provider rates and not keeping up with inflation. While the price of goods continues to rise significantly, the government payments to physicians and hospitals has fallen. And, the government pays Medicare Advantage insurers based on Medicare’s rates. But, these insurers can negotiate the provider rates they please.
To maximize profits their Medicare HMO and PPO plans pay providers lower rates than traditional Medicare so they can profit more. The lower rates not only help insurers generate more revenue, they tend to mean narrow and poor quality provider networks. Consequently, people who need good specialty care that tends to be expensive–eating into insurer profits–either don’t enroll in their plans or, if they are enrolled, they disenroll.
Not surprisingly, Medicare HMOs and PPOs don’t generally have cancer centers of excellence in their networks. Moreover, they take twice as long as the government to reimburse providers for the care they deliver. And, they force physicians and other health care workers to spend oodles of time dealing with prior authorization, while often inappropriately denying care.
Today, nearly one in five health systems has stopped participating in at least one Medicare HMO or PPO. More than six in ten additional health systems are seriously thinking about dropping their Medicare HMO and PPO contracts. It’s a struggle for many health care practices to manage financially.
Practices that do take Medicare patients are finding ways to save that can seriously affect patient care. Some are not willing to deal with the time and final pressures of insurer Medicare Advantage prior authorization requirements. So, they are not offering treatments that require prior authorization. That’s not a good situation for patients in Medicare Advantage needing treatments requiring prior authorization.
Right now, at a minimum, the government should be requiring Medicare Advantage insurers to pay providers Medicare rates. After all, those are the rates upon which the government bases its payments to insurers.
Here’s more from Just Care:
- Medicare Advantage delivers unreliable coverage
- Insurers pay Medicare Advantage brokers to steer you away from Traditional Medicare
- If you want easy health care access and good quality care, you probably want traditional Medicare
- Medicare Advantage networks can be narrow and harmful
- You still can’t trust Medicare Advantage plan provider directories
