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Q: What is the difference between traditional Medicare and Medicare Advantage?
Traditional Medicare is the original federally-run program for seniors and people with disabilities, covering hospital (Part A) and medical (Part B) services across a broad range of providers, with optional Part D (prescription drugs) and Medigap for extra coverage. Medicare Advantage (MA) (Part C) is offered by private insurers and must cover the same services as Traditional Medicare, but may have different billing, coding, and utilization management rules, network restrictions, and varied out-of-pocket costs. As a result, the experience can be very different for patients and providers:
| Feature | Traditional Medicare | Medicare Advantage |
| Network flexibility | Any provider who accepts Medicare | Often limited to plan networks |
| Referral requirements | Rarely required | Required for most services |
| Copays and cost-sharing | Predefined, predictable, standardized | Varies widely by plan |
| Out-of-pocket maximum | None | Yes (federally capped, plan-specific) |
| Part D prescription coverage | Separate plan required | Usually included |
| “Extras” (vision, dental, gym, etc.) | Rare | Often included |
| Coverage denials / prior auth | Minimal | Increasingly common |
| Medigap eligibility | Yes | Not allowed while enrolled |
| Reimbursement to physicians | CMS-set | Negotiated (often lower) |
Source: Investopedia Medicare Comparison
Q: What happens if anesthesiologists are par with Medicare but out of network with a Medicare Advantage plan?
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Par with Medicare Advantage – Emergency Care
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Non-Par with Medicare Advantage – Emergency care | Par with Medicare Advantage – Non-Emergency care | Non-Par with Medicare Advantage – Non-Emergency care |
| Par with Medicare | Receive rates commensurate with individual Medicare Advantage plan | In the absence of a mutual agreement between the non-contracted provider and the Medicare Advantage Plan to receive less than the original Medicare rate, provider must accept the Original Medicare amount as payment in full. [2] | Receive rates commensurate with individual Medicare advantage plan | No guarantees- claim may be denied, may get lower than Medicare rates [5] |
| Non-Par with Medicare | Receive rates commensurate with individual Medicare Advantage plan | Medicare Advantage plan must provide payment in an amount the provider would have received under Original Medicare. [3] | Receive rates commensurate with individual Medicare advantage plan | Medicare Advantage plan must provide payment in an amount the provider would have received under Original Medicare. [3] |
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Opted out of Medicare |
[1] Medicare Advantage plan must pay for emergency services if the physician has not signed a private contract with the plan enrollee | [1] Medicare Advantage plan must pay for emergency services if the physician has not signed a private contract with the plan enrollee | [4] Patient billed directly | Patient billed directly |
Q: What are the consequences of going out of network from Medicare Advantage (MA) plans?
This can be a double-edged sword. On one hand, anesthesiologists may escape low conversion factors and excessive administrative burden. On the other, hospitals—especially those with narrow financial margins—may see coverage gaps, increased out-of-pocket charges to patients, or disruptions to bundled care arrangements.
For anesthesiologists, departing can free them from prior authorization and claim denial purgatory. But for hospitals, especially those relying on MA patient volume, anesthesiologists lack of participation can create friction, unless both parties are aligned on strategy. Open communication and coordinated action are key if going out of network is under consideration.
Q: Can the No Surprises Act (NSA) help anesthesiologists go out-of-network with MA plans?
Sadly not, the NSA does not apply to Medicare nor Medicare Advantage plans.
Q: Isn’t Medicare Advantage supposed to save money? Why is it costing more?
Cost saving was a goal, but the reality is very different.
Medicare Advantage (MA) was designed to foster competition and cut costs through private plan efficiency. However, MedPAC estimates that in 2025 Medicare will spend approximately 20% more per MA enrollees than it would for the same beneficiaries in traditional Medicare. According to the Commission, higher payments to MA plans are primarily driven by two factors: (1) favorable selection, where plans disproportionately attract healthier individuals with lower actual healthcare costs relative to their risk scores and (2) coding intensity, whereby plans record more diagnoses per patient, resulting in higher risk scores and ultimately higher payments).
Major news outlets—including The New York Times and The Wall Street Journal—have spotlighted widespread diagnostic upcoding in MA, including by specific plans, prompting increased scrutiny from Congress and CMS; however, meaningful reforms to address these practices have yet to be enacted.
Q: How fast is Medicare Advantage growing?
Enrollment has skyrocketed from 19% in 2007 to over 54% in 2024. That means more than half of all Medicare beneficiaries are now under Medicare Advantage plans. Projections indicate this trend is expected to persist with enrollment forecast to grow to around 64% by 2033. This could accelerate depending on actions by Congress and the current Administration.
Q: How does frequent plan switching by patients affect anesthesiologists and hospitals?
Patients moving between plans means changing networks, referral rules, billing codes, and reimbursement processes. It also makes preoperative planning, coordination of care and cost estimation more volatile.
Q: How are anesthesiologists impacted by the MA Star Rating system?
The star rating that determines bonuses for MA plans leans heavily on patient experience metrics—including satisfaction with communication, responsiveness, and office interactions.
Throughout this process, anesthesiologists might get penalized in indirect ways—lower contract offers, tighter referral controls, or being excluded from “preferred” networks.
Q: What types of Medicare Advantage plans should I know about?
Here's a quick surgical rundown:
Q: Does the type of MA plan affect how anesthesiologists get paid?
Yes—especially in PPOs, where there's more out-of-network flexibility. But payment also depends on who owns the plan (e.g., insurer vs hospital system) and what vendor is managing it. Some hospital-sponsored MA plans might be more generous to in-network clinicians—but don’t count on it.
Q: What’s the difference in physician payment between MA and traditional Medicare?
Conversion factors for MA are often equal to or lower than traditional Medicare, especially when accounting for:
One study from USC suggests MA payments can be as low as 90% of traditional Medicare when adjusting for administrative friction. On the other hand, some more recent studies have found however that MA plans may pay similar amounts or more than traditional Medicare for hospital services -- although there is wide variation across hospitals and plans.
Q: Is Medigap an option for a patient after switching out of a Medicare Advantage program?
Not easily. In many states, the patient loses guaranteed issue rights to buy a Medigap policy once enrolled in a MA plan—unless the change takes place within a specific trial period or the patient lives in a state with broader protections. This can leave patients—and indirectly, physicians—vulnerable to gaps in catastrophic coverage.
Q: Is the network for the traditional PPO/HMO of an insurer the same as that of its Medicare Advantage product?
Not usually. The network for its Medicare Advantage product is often much narrower and more exclusive than that of its traditional PPO/HMO network.
[1] From Chapter 6 of the Medicare Managed Care Manual, Section 60.2 - Confirmation of Eligibility for Participation in Medicare: Excluded and Opt-Out Provider Checks: “If a physician or other practitioner opts out of Medicare, that physician or other practitioner may not accept Federal reimbursement for a period of 2 years. The only exception to that rule is for emergency and urgently needed services where a private contract had not been entered into with a beneficiary who receives such services. See 42 CFR 405.440. An MA organization must pay for emergency or urgently needed services furnished by a physician or practitioner to an enrollee in their MA plan who has not signed a private contract with a beneficiary, but may not otherwise pay opt-out providers.”
[2] Under 42 CFR § 422.100(b) (“Services of noncontracting providers and suppliers”):
Chapter 4 of the Medicare Managed Care Manual, Section 110.1.3 – Services for Which MA Plans Must Pay Non-contracted Providers and Suppliers specifies that:
“MAOs may negotiate payment amounts with their contracted providers and need not follow original Medicare payment rates. However, in the absence of a mutual agreement between the non-contracted provider and the MAO to receive less than the original Medicare rate, non-contracted providers must accept the original Medicare amount as payment in full.”
[3] As noted, above under 42 CFR § 422.100(b), MA plans must provide “payment in an amount the provider would have received under original Medicare (including balance billing permitted under Medicare Part A and Part B)” to non-contracted providers for basic benefits described in paragraph (a).
Chapter 6 of the Medicare Managed Care Manual, Section 100 “Special Rules for Services Furnished by Non-Contract Providers” goes on to states “Consistent with §1852(a)(2) and §1852(k)(1) of the Social Security Act, non-contract providers must accept as payment in full payment amounts applicable in Original Medicare. Thus, this provision of law imposes a cap on payment to non-contract providers of provider payment amounts plus beneficiary cost-sharing amounts applicable in Original Medicare, and ensures that non-contract providers not balance bill MA plan enrollees for other than MA plan cost-sharing amounts.”
Chapter 4 of the Medicare Managed Care Manual, Section 170.2 Balance Billing by Provider Type states “Non-contracting, non-(Medicare)-participating provider: The MAO must pay the non-contracting, non-participating (non-par) provider the difference between the enrollee’s cost-sharing and the original Medicare limiting charge, which is the maximum amount that original Medicare requires an MAO to reimburse a provider. The enrollee only pays plan-allowed cost-sharing, which equals:
[4] From Chapter 6 of the Medicare Managed Care Manual, Section 60.2
Curated by: department of Payment and Practice Management
Date of last update: September 18, 2025
You do not have to make a payment at this time, but you can reach out to your practice/group leader to find out when they plan to pay your dues. Email or call the ASA Support team for assistance: (630) 912-2552 or info@asahq.org.
