Inpatient Prices In Medicare Advantage Vary Modestly Across And Within Hospitals.

Area of Science:

• Health Economics
• Healthcare Policy
• Medical Services Research

Background:

• Medicare Advantage (MA) is a growing segment of Medicare.
• Understanding provider price differences between MA and traditional Medicare is crucial for policy and patient costs.
• Previous research indicates price variations across different insurance types.

Purpose of the Study:

• To compare inpatient provider prices between Medicare Advantage and traditional Medicare.
• To analyze the extent of price variation for MA services across hospitals and insurers.
• To benchmark MA price variability against commercial and Medicaid prices.

Main Methods:

• Utilized national healthcare claims data for analysis.
• Calculated average inpatient prices for MA and traditional Medicare.
• Assessed the percentage of hospitals with MA prices within a 5% threshold of traditional Medicare prices.
• Quantified price variation for MA, commercial, and Medicaid.

Main Results:

• Average inpatient Medicare Advantage prices were 97% of traditional Medicare prices.
• Only 39% of hospitals had average inpatient MA prices within 5% of traditional Medicare.
• Medicare Advantage prices exhibited significantly less variation compared to commercial or Medicaid prices.

Conclusions:

• Medicare Advantage provider prices are generally aligned with traditional Medicare rates.
• Despite overall similarity, significant hospital-level price discrepancies exist within MA.
• MA prices demonstrate greater stability and predictability than commercial or Medicaid prices.