Federal payment woes, Medicare Advantage denials and delayed discharges: Our top leadership stories of 2023

Hospitals and health systems faced no shortage of financial challenges in 2023, and they say insufficient federal support has compounded those difficulties.

Over the next several days, Chief Healthcare Executive® is taking a look back at our most read stories in several different categories. Today, we look at the most read stories about leadership issues in 2023, and frustrations with Medicare payments remain a top concern of hospital leaders.

Here’s a rundown of stories on leadership concerns that garnered the most reader attention over the past year.

Jesse M. Ehrenfeld, president of the American Medical Association, says Medicare payments to doctors are woefully insufficient. (Photo: AMA)

1. Doctors, hospitals denounce Medicare payment plans for 2024

Physicians and hospital executives shared a common sentiment: They’re expecting better reimbursements for Medicare.

The Centers for Medicare & Medicaid Services approved a 3.4% reduction in the conversion factor, the formula used to determine physician payments, in 2024. Jesse M. Ehrenfeld, president of the American Medical Association, called it “a recipe for financial instability.”

Healthcare advocacy groups said insufficient payments to doctors are threatening access to care, and they implored policymakers to include annual inflation adjustments in payments.

Hospitals are getting a boost from CMS, but health systems say it isn’t enough. CMS said it finalized an increase of 3.1% in outpatient payments for 2024.

2. Hospitals push back against Medicare Advantage plans

Medicare Advantage plans are gaining more popularity, and hospitals say they are seeing more headaches in dealing with those plans.

Health systems say they are seeing more denials from Medicare Advantage plans, and they are concerned they are going to see more plans skirting federal regulations in the coming year.

Mark Newton, a senior vice president for Kaufman Hall who heads the firm’s performance improvement practice, says the relationship hospitals have with payers has become more adversarial, particularly with Medicare Advantage plans.

“One of the big issues almost all our clients are addressing now is Medicare Advantage,” Newton told Chief Healthcare Executive® in a recent interview.

3. Discharge delays: Hospitals are forced to keep patients who could be released

Health systems cite another issue that is affecting their bottom line: They are keeping people in the hospital longer than necessary.

Hospital executives say that they are routinely housing some patients after they’re ready to be discharged. In many instances, hospitals are waiting for a bed in a nursing home or other long-term care facility.

“Hospitals get paid very little or nothing to care for these patients once their acute care issue is resolved,” said Cassie Sauer, CEO of the Washington State Hospital Association. “And additionally, hospitals lose revenue from patients whose care is delayed because the beds are full.”

4. Two Wisconsin hospitals systems are moving closer to merger

The planned merger of Froedtert Health and ThedaCare took a key step when the boards of the two systems approved a definitive agreement to come together.

The organizations are looking to create a new system that would include 18 hospitals and many other care sites.

Froedtert, based in Milwaukee, operates 10 hospital locations and more than 45 clinics throughout Wisconsin. ThedaCare operates eight hospitals and a host of other care sites across the state.

The Froedtert and ThedaCare brand names will continue to exist after the merger is complete, the systems said.

5. More hospital mergers are happening, and more may be on the way

The pace of hospital mergers slowed down throughout the COVID-19 pandemic, but more health systems and hospitals announced deals to join or acquire other organizations in 2023.

The hospital industry witnessed some major deals over the past year, but none gained more attention than Kaiser Permanente’s plans to acquire Geisinger Health, the Pennsylvania system.

Anu Singh, managing director and leader of partnerships, mergers and acquisitions at Kaufman Hall, told Chief Healthcare Executive that he expects to see more hospitals making deals in the months ahead.

“There are organizations that are looking for complementary resources and capabilities … there are ones in the middle who have maybe some increased concerns about their long-term viability of remaining independent,” he says.