In its June report to Congress, the Medicare Payment Advisory Commission (MedPAC) examines Medicare payment incentives, beneficiary enrollment decisions, and the effects of Medicare Advantage (MA) enrollment on provider finances. The report also covers Medicare payment operations and improper payments, access to hospice and palliative services, and Medicare ground ambulance services.
Chapter 4 of the report examines the effects of MA enrollment on hospital financing. The commission found that MA beneficiaries had longer hospital stays than comparable fee-for-service beneficiaries and identified provider concerns related to prior authorization, claims denials, and administrative burden. However, MedPAC did not find statistically significant evidence that higher market-level MA penetration was associated with changes in hospitals’ overall operating margins and revenues.
The report also examines how MA enrollment growth affects the distribution of Medicare uncompensated care (UC) payments. MedPAC found that, under the current payment structure, hospitals with similar levels of uncompensated care can receive different payment amounts based on their share of MA enrollment. As a result, hospitals with lower MA enrollment can receive comparatively smaller uncompensated care payments despite facing similar uncompensated care burdens. The report also acknowledges concerns from some essential hospitals that MA plans are excluding hospitals with high UC payments from their networks because the plans do not want to pay the full UC payment amount.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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