Scripps Health, a prominent medical provider in San Diego County, has announced that its clinic and coastal medical groups will no longer participate in Medicare Advantage plans starting January 1, 2024. This decision will affect approximately 32,000 San Diego County seniors who are enrolled in various Medicare Advantage plans. While the move has been rumored for months, Scripps’ CEO, Chris Van Gorder, confirmed the news and emphasized that it was not a negotiating tactic. The organization’s other affiliations, such as Scripps Mercy Physicians Medical Group, will continue to accept Medicare Advantage plans. However, Scripps Coastal and Scripps Clinic have been the most sought-after provider networks within the organization.
The decision by Scripps Health to withdraw from Medicare Advantage plans has left many patients searching for alternative options. Some, like Roc Rogers, who has been with a SCAN plan and a Scripps doctor since 2018, are considering the cost of supplemental health insurance to switch to original Medicare while keeping their preferred doctors and specialists. However, this could mean an additional monthly cost of nearly $300 and the possibility of not being accepted. Others, like Dave Averett, have had less than satisfactory experiences with Scripps as patients and are not concerned about staying with the organization. Scripps’ decision was driven by financial considerations, as the organization has been losing $75 million on full-risk Medicare Advantage and expects its first operating loss in years.
Scripps Health’s decision is in line with a trend among healthcare providers, with other prominent systems like Mayo Clinic and Vanderbilt Health also withdrawing from Medicare Advantage due to shrinking margins. Increased labor and supply costs have led to financial losses for medical providers across the nation. Scripps, which is known for its premium medical services, is on track to suffer its first operating loss in recent memory. Despite still having substantial cash reserves, Scripps must maintain these funds in order to borrow the additional billions necessary to repair and replace medical campuses and meet seismic improvement mandates. The organization’s ability to borrow and provide care to communities would be severely impacted if it continues to lose money. While the financial challenges faced by Scripps are not immediately apparent to patients, they now face the task of finding new doctors during the Medicare open enrollment period. Scripps has set up a hotline to assist patients in finding alternative providers.