Medicare Advantage has long been sold as a cheaper, more efficient alternative to traditional Medicare. But as denial rates for claims rise, hospitals are voting with their feet — dropping Advantage plans and directing patients back to the fee-for-service program.
Pearl Health CEO Michael Kopko says the original bargain underlying Medicare Advantage has broken down. He questions whether the model ever delivered the efficiency it promised, given the mounting friction hospitals face when seeking reimbursement.
The shift is a practical response to financial pressure: when insurers deny more claims, hospitals lose revenue and administrative time. By returning to traditional Medicare, systems regain predictable payments — but they also give up the patient incentives and care-management tools that Advantage plans were meant to provide.