Bad payor policies, particularly in Medicare and Medicaid, have created significant challenges for physicians.  The introduction of commercial carriers into government programs was intended to reduce costs and promote value-based care. However, instead of simplifying the system, it has led to administrative burdens, misaligned incentives, and hurdles for physicians trying to offer appropriate care. Physicians now face obstacles like varied credentialing, complex prior authorization processes, and inconsistent policies across different states.  

One of the most concerning aspects of this system is how insurance companies take advantage of the system’s structure to increase profits. Medicare Advantage plans, in particular, have become a major source of revenue for these carriers. Some companies use questionable tactics, such as inflating patient diagnoses to receive higher payments from the government. This not only drives up costs but also undermines the integrity of healthcare by prioritizing profits over patient care. As a result, many physicians are forced to navigate these convoluted processes while being compensated less, threatening the sustainability of their practices.  

On top of that, the increasing use of artificial intelligence (AI) by payors has added yet another layer of complexity. Algorithms designed to cut costs are denying care for patients inappropriately, often with little oversight. This runs counter to Medicare’s purpose of providing a safety net for its beneficiaries. Until there is better federal and state regulation of these practices, physicians will continue to struggle under the weight of bad payor behavior, while insurance companies reap record profits at the expense of taxpayers and patient care.  

To learn more about how bad payor policies and tactics are impacting healthcare and revenue cycle management, listen to the most recent episode of Zotec Answers with Mark Isenberg.