Doctors have a growing list of frustrations with Medicare Advantage plans, and the problems are concrete: lower pay, slower reimbursement, high claim denial rates, and a prior authorization process that eats into clinical time and overrides medical judgment. These aren’t abstract complaints. As of 2024, 32 major health systems across the country have dropped or limited their Medicare Advantage contracts, and another 45% of health system CFOs say they’re considering doing the same.
Lower Pay and Slower Reimbursement
Medicare Advantage plans pay physicians an estimated 10% to 15% less than what traditional Medicare pays for the same services. That gap alone would strain most practices, but it’s compounded by the speed of payment. MA plans take roughly twice as long to reimburse providers as original Medicare. For a physician practice already operating on thin margins, that combination of lower rates and delayed checks creates real financial pressure.
The math gets worse when you factor in denied claims. Research published in Health Affairs found that MA plans deny 17.7% of initial claims. About 60% of those denied claims get resubmitted, and two-thirds of resubmissions are eventually overturned. In other words, the majority of denied claims shouldn’t have been denied in the first place. But the process of fighting those denials costs time and staff resources, and providers still end up losing about 7.2% of the total dollars they originally billed. For non-inpatient institutional claims, which include outpatient hospital and post-acute settings, the initial denial rate climbs to 21.1%.
Prior Authorization Overrides Clinical Judgment
Prior authorization is the requirement that a doctor get approval from the insurance plan before ordering a test, procedure, or medication. In theory, it’s a check on unnecessary care. In practice, it’s become one of the biggest sources of friction between physicians and MA plans.
A 2024 American Medical Association survey found that 89% of physicians say prior authorization significantly or somewhat increases burnout. When asked which insurers impose the heaviest prior authorization burden, physicians pointed to the same companies that dominate the Medicare Advantage market: UnitedHealthcare topped the list, with 72% of physicians rating its burden as high or extremely high. Humana followed at 64%, Anthem/Elevance at 59%, Aetna at 57%, Cigna at 55%, and Blue Cross Blue Shield at 54%.
The frustration isn’t just about paperwork volume. It’s about what happens to patients while they wait. A doctor may determine that a patient needs a specific imaging study or a referral to a specialist, only to have the plan delay or deny the request. When most of those denials are eventually reversed on appeal, the prior authorization process looks less like a quality safeguard and more like a financial strategy that shifts administrative costs onto providers and delays care for patients.
AI and Algorithms in Coverage Decisions
A newer concern is the use of automated software and artificial intelligence tools to make coverage decisions. Members of the U.S. House of Representatives have urged the Centers for Medicare and Medicaid Services (CMS) to investigate whether MA plans are using AI-driven algorithms to deny claims more aggressively than traditional Medicare coverage rules would allow. The concern is that these tools can issue blanket denials without meaningfully reviewing individual patient circumstances, effectively replacing physician clinical judgment with a cost-cutting algorithm.
Lawmakers have called on CMS to require MA plans to report prior authorization data by type of service, beneficiary characteristics, and timeliness of decisions, and to verify that their coverage guidelines are not more restrictive than what traditional Medicare covers. That last point matters: MA plans are legally required to cover everything traditional Medicare covers, but in practice, the prior authorization process can function as a barrier that discourages providers and patients from pursuing covered services.
Post-Acute Care Gets Hit Hardest
Doctors who care for older adults after a hospitalization face some of the steepest obstacles with MA plans. Skilled nursing facility stays, home health services, and therapies like physical therapy and cardiac rehabilitation are frequently subject to coverage denials. Commonwealth Fund data shows that nursing home services and therapy services have some of the highest rates of denial appeals, alongside emergency room visits.
What’s troubling is the trend over time. Across all service categories, the proportion of denied claims that were successfully overturned on appeal dropped from 7.1% in 2016 to just 3.0% in 2022. For home health and nursing care specifically, overturn rates fell by three to four times over that period. That decline doesn’t necessarily mean the denials became more accurate. It may reflect a system where providers and patients have become less likely to win appeals, making it harder to challenge coverage decisions even when they seem wrong.
Network Instability and Patient Continuity
Medicare Advantage plans use provider networks, and those networks can change. MA plans and providers can initiate or terminate contracts at any time during the year, but most patients can only switch plans during annual open enrollment. That mismatch creates a real problem: a patient may choose a plan because their doctor is in-network, only to find mid-year that the contract has ended. CMS can declare a special enrollment period when patients are substantially affected by a mid-year network change, but that’s a reactive fix, not a preventive one.
Research from MedPAC, the congressional advisory body on Medicare payment, shows that MA networks tend to include less-costly providers than the regional average. The quality implications are mixed, with some studies finding narrower networks associated with better quality, others finding worse quality, and others finding no clear relationship. What is clearer is that narrow networks may disproportionately affect patients who are dually eligible for Medicare and Medicaid, as well as those with complex chronic conditions like cancer or serious behavioral health needs. For doctors treating these patients, being excluded from a network, or watching a patient lose access to a specialist mid-treatment, is a direct threat to care quality.
Documentation Demands and Audit Pressure
MA plans receive risk-adjusted payments from the federal government, meaning they get paid more for sicker patients. To verify that plans aren’t inflating patient diagnoses to collect higher payments, CMS conducts Risk Adjustment Data Validation (RADV) audits. These audits require insurance companies to collect medical records from physicians and hospitals to prove that the diagnoses they reported are supported by documentation from face-to-face visits.
For physicians, this translates into strict documentation requirements. Every record submitted must be legibly signed and dated by the credentialed provider who conducted the visit. If a signature or credential is missing, the record is flagged as invalid. CMS allows an attestation form as a workaround, but that form has its own detailed requirements, and any alteration, incomplete field, or mismatched date of service renders it invalid. The practical effect is that doctors working with MA patients face an extra layer of documentation scrutiny that doesn’t exist in the same way with traditional Medicare.
Health Systems Are Walking Away
The tensions between providers and Medicare Advantage plans have moved beyond complaints and into action. A 2024 survey of 135 health system chief financial officers found that 16% are actively planning to stop accepting one or more MA plans within two years, and 62% say collecting payment from MA plans is “significantly more difficult” than it was just two years ago.
The list of health systems that have already dropped or limited MA contracts reads like a cross-section of American healthcare: Vanderbilt Health in Nashville, Memorial Hermann in Houston, Scripps Health in San Diego, CommonSpirit in Colorado, the Ohio State University Wexner Medical Center, and dozens more spanning from Maine to Oregon. The most commonly cited reasons are excessive prior authorization denial rates and slow payments.
New Federal Rules Aim to Rein In Plans
CMS has started tightening the rules. A final rule for contract year 2026 includes several provisions designed to address the most common physician complaints. One restricts MA plans from reopening and reversing a previously approved inpatient admission based on information gathered after the fact, except in cases of obvious error or fraud. In plain terms: if a plan approves a hospital stay, it can no longer come back later and refuse to pay for it.
Other provisions close loopholes in the appeals process. Plans will now be required to notify both the patient and the provider when they make a coverage decision, and patients will retain the right to appeal coverage denials that affect ongoing treatment. The rules also clarify that a patient’s financial liability for a service cannot be determined until the MA plan has actually made a decision on the provider’s claim, preventing plans from shifting costs to patients before the coverage question is resolved.
Notably, CMS chose not to finalize proposed provisions that would have required health equity analyses of utilization management policies or established guardrails for AI use in coverage decisions. Those omissions suggest that some of the issues driving physician frustration, particularly around algorithmic denials, remain unaddressed at the regulatory level.