Medicare Advantage enrollees are representing a rising share of total hospital inpatient days, according to a new report from KFF. Between 2015 and 2022, Medicare Advantage’s share of total inpatient hospital days increased from 13% to 23%. When examining just Medicare inpatient hospital days in 2022, Medicare Advantage beneficiaries account for 48%.
KFF’s report, published last week, used data from hospital cost reports sent to the Centers for Medicare and Medicaid Services.
The researchers found that three in 10 hospitals had more inpatient days from MA beneficiaries compared to traditional Medicare beneficiaries in 2022. In 2015, the share of hospitals with more MA than traditional Medicare inpatient days was 5%, versus 30% in 2022. The share of inpatient days attributed to MA has increased the fastest at non-metropolitan hospitals.
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In addition, the share of inpatient hospital days for MA beneficiaries differs by county. Counties with higher MA penetration had higher MA inpatient day shares, while counties with lower MA penetration had lower MA inpatient day shares.
In 2022, the proportion of inpatient days attributed to MA beneficiaries also varied significantly between hospitals within counties. In Allegheny County, Pennsylvania, where MA enrollment is high, the share of inpatient days for Medicare Advantage enrollees ranged from 11% to 58% among different hospitals. Counties with lower MA penetration — like Oklahoma County, Oklahoma — showed a wide range as well, with Medicare Advantage inpatient days varying from nearly 0% to 24% across hospitals.
“The wide range in Medicare Advantage inpatient day shares among hospitals within counties is striking, particularly in larger counties with high penetration in these plans,” said Jamie Godwin, a senior analyst with KFF’s Program on Medicare Policy and lead author of the analysis, in an email. “Some hospitals in Los Angeles and Allegheny Counties had more than half of their inpatient days reimbursed by Medicare Advantage, while others in the same counties had very few, meaning Medicare Advantage enrollment growth may have larger impacts for some hospitals and smaller impacts for others.”
The findings come at a time when many providers are expressing concerns over the MA program, and some are ending their contracts with insurers due to payment delays, strict coverage determinations and payment rates, according to KFF. For example, one controversial practice from MA plans is putting hospitalized patients on “observation status,” which frequently leads to lower payments to hospitals and higher costs for patients.
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“As Medicare Advantage enrollment grows, these plans’ business practices have a larger impact on hospital operations and revenue cycle,” Godwin said. “Unlike traditional Medicare, Medicare Advantage plans establish networks and are allowed to use utilization management tools, such as prior authorization. They also negotiate payment rates with each provider. As Medicare Advantage becomes a larger part of the market, hospitals, and other providers have to consider how to balance the tradeoffs that presents.”
Godwin added that “these trends are expected to continue, but along with growth in overall inpatient day shares, it may be that variation grows as well, particularly if more hospitals end Medicare Advantage contracts.”
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