Earlier this month when news broke that St. Charles Health was exploring cutting ties with Medicare Advantage plans that serve about 26,000 people in Central Oregon, it sounded like a done deal.
But now, though no decisions are final, the health system is for the first time reporting some encouraging signs in its negotiations with insurers.
The note of cautious optimism represents a striking change from previous St. Charles statements about the situation. The prospect of the system pulling out of Medicare Advantage has sparked alarm among providers and advocates who said such a move would cause new costs and other significant challenges for a group of highly vulnerable patients ill-prepared to cope with them: seniors on fixed incomes.
In a statement released in response to questions from The Lund Report, system officials said they are “listening.”
“We would like to reassure our patients that St. Charles leaders are listening to their concerns and are actively negotiating with several insurance providers to address ongoing, underlying issues with Medicare Advantage plans,” said the statement issued by a system spokesperson.
“We are encouraged that some of these insurance companies have indicated they are willing to work with us to find creative and sustainable solutions to complex issues and it remains our hope that we will be able to reach agreements in our current contract negotiations.”
The statement represents a rare glimpse at a normally secret process, the private negotiations between hospitals and insurers over plans and reimbursement rates. The St. Charles’ statement did not specify which insurers it referred to, but the largest one in the region is PacificSource, which covers about 15,000 Central Oregonians in Medicare Advantage.
Open enrollment for Medicare starts Oct. 15 and ends Dec. 7, leaving limited time for the system’s negotiations to bear fruit.
Dueling concerns
In an earlier interview, executives for the health system told The Lund Report that Medicare Advantage plans were too often obstructing appropriate care for patients with excessive paperwork, denials and delay.
“These plans are great as long as patients don’t need them for health care,” Mark Hallett, the system’s chief clinical officer, had said.
But if St. Charles pulls out of the plans it serves, seniors could be forced to shift coverage to traditional Medicare to ensure access to needed care. And for some patients, changing plans could restrict benefits and add significant costs, senior advocates told The Lund Report.
In Central Oregon, “we have several Medicare Advantage plans that do offer pretty good plans for no monthly premiums, so people have been pretty happy with them,” said Kathleen Harrington, a volunteer Medicare counselor who works with the Council on Aging of Central Oregon and the state Senior Health Insurance Benefits Assistance program, known as SHIBA.
Medicare Advantage plans are available through private insurers, but traditional Medicare offered through the federal government can come with higher out-of-pocket payments. It covers only 80% of costs, requiring the patient to pay the rest, and “20% of a big bill can be a big bill,” Harrington said.
Medigap plans can cover the cost, but some patients face barriers to buying them, and sorting through the options is not easy.
“If in fact the contract negotiations don’t go well between the carriers and the hospital, it’s going to cause significant disruption” for people, Harrington said, adding that many seniors won’t understand the changes. “It’s going to be extremely difficult for people, so hopefully, it’ll work out. But we don’t know.”
Central Oregon situation highlights national questions
St. Charles is just one of several health systems across the country that have sought to pull out of Medicare Advantage, though some have stopped short after negotiating better contracts. In recent years, the Advantage plans have faced increasing scrutiny over fraud, deceptive marketing and other issues.
Last year, the federal Centers for Medicare & Medicaid Services reported that complaints more than doubled in 2021 for seniors enrolled in Medicare Advantage Plans.
Carisa Dickson, a program specialist for the Multnomah County Department of Aging, Disability and Veterans Services — also part of the SHIBA program — said that for her, the situation just shows the need for leaders in Washington, D.C., to expand traditional Medicare benefits for seniors.
Unlike Medicare Advantage, the traditional program gives patients lots of choice in providers and doesn’t place limitations on care.
But it lacks some of the benefits like vision, dental and transportation used to sell Medicare Advantage plans — benefits that often turn out to be “very limited,” she said.
The situation in Central Oregon and elsewhere “highlights the fact that there is a need for original Medicare to expand and offer more,” Dickson said. “Dental health is a serious gap in Medicare coverage.”
