You've heard wrong. Mercs have pre-set stats at each level. Nothing can change those stats. Leveling a merc manually from a low level adds up to a waste of time. I repeat: a complete waste of time levelling a merc up yourself.
The only difference in merc stats come from what difficulty they are hired from. Normal mercs have the highest stats, Hell mercs have the lowest. It's something like 100-200 life difference, and ~5-10 resist and str/dex. Overall it's a BIG difference, especially when you want your merc to wear a high strength-requirement item, or you want your merc to survive better.
So, if you've got a merc that's 20 levels lower than you and you want him/her at your level, do the right thing: unequip and re-hire.