The Centers for Medicare & Medicaid Services (CMS) recently announced a 5.06 percent increase in Medicare Advantage payments from 2025 to 2026, totaling approximately $25 billion. While this annual rate-setting process provides a financial update, it also presents a critical opportunity to spotlight urgent reforms needed to strengthen the program and ensure it delivers on its promise to patients.
Too often, Medicare Advantage insurance plans, which sit between CMS and health care providers, delay patient care, impose unnecessary administrative burdens, and complicate the claims process—drawing clinicians’ time and attention away from direct care. Specifically, they stall patient care and provider reimbursements through burdensome prior authorization requirements and service denials. The Medicare Payment Advisory Commission (MedPAC) acknowledged these issues in its 2025 Medicare Payment Policy report, stating that “important reforms are needed to improve Medicare’s policies of paying and overseeing Medicare Advantage plans.”
Ascension’s Commitment to Care for the Most Vulnerable
As a faith-based health provider, Ascension is committed to delivering high-quality, compassionate care, especially for the poor and vulnerable. With more than 60 percent of our patients covered by Medicare or Medicaid, we support programs that expand access to affordable healthcare, including through alternatives to traditional Medicare like Medicare Advantage. However, trends clearly indicate that Medicare Advantage requires urgent reform to ensure enrolled patients can receive timely care without unnecessary administrative hurdles. For example, from April 2023 through March 2024, Medicare Advantage plans were nearly twice as likely to deny Ascension claims based on determination of medical necessity than traditional Medicare, and more than 2.5 times as likely to deny claims based on determination of insufficient information.
The Impact of Medicare Advantage Restrictions
Overly-restrictive coverage parameters within Medicare Advantage plans often lead to unjustified denials of care. In fact, nearly 20 percent of Medicare Advantage denials actually meet Medicare fee-for-service coverage rules. These restrictions delay hospital admissions, creating safety risks, stress and confusion for patients. Across Ascension hospitals, we experience 87 percent more observation visits per inpatient admission in Medicare Advantage, highlighting the program’s barriers to care.
Prior authorization is another major challenge, diverting hospital resources, delaying treatment, and putting patients at risk. Nine in 10 physicians report that these requirements negatively impact patient outcomes. Across our system, real-life cases reveal how prior authorization can stand between patients and the care they urgently need, including:
- A provider spending hours justifying a lifesaving device for a critically ill Medicare beneficiary.
- A delayed Achilles tendon surgery due to a missing device code, despite initial approval.
We believe patient care decisions should be guided by physicians—not insurance companies. While we support the need for providers to properly document indications for their treatment choices, the growing unnecessary and unproductive burden of restrictions imposed by Medicare Advantage plans too often undermine clinical judgment, placing insurers between patients and the care they need.
Medicare Advantage Reimbursement: A Growing Financial Strain
Traditional Medicare already reimburses providers below the cost of care, but Medicare Advantage pays even less—averaging 90.6 percent of traditional Medicare rates. For safety-net and rural hospitals, which care for high volumes of Medicare, Medicaid, and uninsured patients, these chronic underpayments are simply unsustainable. Between 2005 and 2023, 146 rural hospitals in the United States closed to inpatient care, citing undercompensated care as a primary driver. Even more are threatened today. As Medicare Advantage enrollment continues to grow, its inadequate reimbursement rates pose a serious threat to hospital stability and patient access—especially in communities that can least afford disruption in care.
A Call for Medicare Advantage Reforms
Ascension urges lawmakers to modernize Medicare Advantage by:
- Ensuring patients receive necessary care when clinicians determine it is medically required.
- Implementing enforcement mechanisms to help prevent abusive insurer practices like prior authorization delays, claims denials and complex appeals processes.
Every American, regardless of circumstance, deserves high-quality, efficient and affordable healthcare. To achieve that, Medicare Advantage must be reformed to prioritize health over hurdles.
