Topic bucket: Payer changes
Twenty-one health systems have terminated Medicare Advantage contracts so far in 2026. Mayo Clinic, Mount Sinai, UNC Health, Memorial Hermann, BayCare, Providence. NewYork-Presbyterian and UnitedHealthcare went out of network on May 1 with no new agreement in place. About 2.9 million MA enrollees, roughly one in ten, are being forced into a new plan this year because their insurer pulled out of their market. The forced disenrollment rate sat near 1% for most of the prior decade. In 2026 it's 10%. That isn't a market hiccup. That's the market breaking.
Everyone is calling these terminations a stand against bad payer behavior. Prior auth denials. Slow reimbursement. Narrow networks. Scripps reportedly said they were losing roughly $75 million a year on those contracts. I'm not going to argue with any of that. The payers earned every bit of the bad press they're getting.
But here's the thing nobody wants to say out loud. Walking away from Medicare Advantage doesn't fix the underlying problem. You weren't losing money because of Medicare Advantage. You were losing money because you can't manage chronic disease patients between office visits. MA is just the only payer that calls you on it.
Traditional Medicare doesn't punish you for readmissions the same way. It pays you the same rates whether the patient ends up in the ED twice a month or not. So when a health system flips back to fee-for-service Medicare, the financial math gets prettier on paper for a quarter or two. Then the underlying disease costs catch up and you realize you traded a payer fight for a slower bleed.
I worked inside payers. Blue Cross, Aetna, CVS, all of it, before I started Welby. I have seen this movie. When health systems lose leverage with one payer, they eventually lose it with all of them. The thing that gives you leverage isn't size or brand. It's outcomes. Specifically, your ability to lower total cost of care for a defined population. If you can't do that, every payer eventually treats you the way MA is treating these systems right now. It just takes longer for traditional Medicare and commercial to get there.
The 21 systems that walked? Some of them have a plan. Most of them are buying time. They're hoping their MA-heavy regions will see traditional Medicare absorb the gap, or that they can renegotiate a better contract in 18 months when the disenrolled members come back through open enrollment. That isn't strategy. That's hope wearing a strategy costume.
Here's what's actually broken. Take any health system with a meaningful Medicare population and look at how their highest-utilizing chronic-disease patients get managed between office visits. The honest answer is: barely. A handful of phone calls. Some portal messages. A nurse navigator program that's running on Excel and two overworked RNs covering thousands of attributed lives. I don't have a clean published statistic on the average number of unstructured patient touches per year, so verify the specifics for your own population before quoting any number. But every CFO and CMO reading this already knows the order of magnitude. It's a lot. None of it is being captured cleanly. None of it is generating revenue. All of it is landing on a PCP who is already underwater.
That's the operating layer your finance team never sees on a P&L. It's where the readmissions and the ED visits get cooked.
Build a real clinical operating layer between visits and you get a different conversation with every payer. You can show MA you reduced ED utilization on a defined cohort. You can show traditional Medicare you closed quality gaps that move your Star-adjacent metrics. You can show commercial you brought blood pressure under 130 within 90 days. Those are real numbers. We see those patterns across our customer book. I won't drop client names in a blog post, but the consistency is the point. Systems that have this layer don't have to walk away from MA. They negotiate harder with MA because they can prove the patient costs less under their management.
I'm not saying don't terminate bad contracts. Some of these MA deals deserve to die. I'm saying don't confuse the termination for the fix.
If you're a CFO or CMO reading this on a Monday morning, here's the play.
Pull your last 12 months of MA patients with hypertension, type 2 diabetes, or congestive heart failure. Look at admissions, readmissions, ED utilization, and per-member-per-month spend. Compare to your matched traditional Medicare cohort. If the gap is small, your problem isn't the payer. Your problem is your care model. Fix that first and the contract economics start to change.
Then look honestly at what you're spending today to manage those patients between visits. If the answer is "we have a small nurse navigator program covering thousands of attributed lives," you don't have a program. You have a thank-you note to the quality team. The math on real care management runs closer to one clinician per a few hundred active patients depending on acuity, and you can verify your own ratios with your operations team. If you can't staff that internally, build it with a partner who can take the financial risk on the reimbursement codes that fund it. CCM, APCM, RPM, AWVs. The codes are not the product. The clinical work is the product. The codes are how you pay for it.
One last thing. There's a quieter story underneath the MA exodus. Some of the systems walking are doing it because they want to push their Medicare patients onto their own ACO REACH or MSSP book. That's a sharper play. But it only works if the in-between-visit care infrastructure is real. ACO REACH is scheduled to wrap at the end of this year and the new ACO LEAD model picks up the baton. Systems that can demonstrate cost reduction on attributed lives will have leverage in that transition. The ones who can't will get the same treatment from traditional Medicare that they're getting from MA, just on a longer timeline.
I keep saying this and people keep nodding and then doing the opposite. What wins is not size, not brand, not contract leverage. It's whether you built the home-based clinical layer that actually moves the numbers. Everything else is a confession dressed up as a press release.
