In fiscal year 2024, Medicare Advantage patients remained in the hospital 11.2% longer on average than those in traditional Medicare, according to a June 15 report from the Medicare Payment Advisory Commission.
MedPAC advises Congress on the Medicare program. Its June report noted how HHS’ financial report for fiscal 2025 attributed Medicare for an estimated $56.7 billion in improper payments, including overpayments, underpayments and those lacking sufficient documentation. More than half of that amount stemmed from fee-for-service Medicare, while $23.7 billion was driven by MA.
Here are six other notes from the report:
1. Medicare spending was $1.1 trillion in 2024 — 3.8% of GDP and 18% of national healthcare spending — and is projected to exceed 5% of GDP by 2032. This is driven primarily by volume and intensity of services and items for beneficiaries.
2. Hospitals with up to 100 beds have lower costs and bring in less revenue as Medicare Advantage penetration increases, and they see boosts to margins. Hospitals with more than 250 beds saw stronger revenues associated with greater MA penetration but no correlation with margins, according to the report.
3. For hospitals that are not in a health system, a 10 percentage-point increase in market-level MA penetration was linked to a 3.1% decline in all-payer operating revenues, as well as a 3% decline in costs.
4. Audit results suggest that discrepancies with medical records, such as unsubmitted documentation, contributed to 85% of improper Medicare Advantage payments.
5. Agents make $208 more for enrolling a beneficiary in MA versus Medigap and a prescription drug plan. In the following year, agents could receive $347 when an enrollee either stayed in their initial MA plan or switched to a similar one. For enrollees who stay in their Medigap plan and PDP, agents would receive $243, according to the report.
6. The number of skilled nursing facilities dropped 5%, from 12,720 to 12,050, as median market-level MA penetration for SNFs grew to 54% from 2013 to 2024.
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