MA Quality Bonus Program Did Not Boost Overall Performance Quality

The Medicare Advantage quality bonus program did not lead to any significant improvements in overall performance quality for Medicare Advantage plans, a Health Affairs report found.

CMS introduced the quality bonus program in 2012 to incentivize private payers that offered Medicare Advantage health plans. Payers can receive two financial bonuses if they earn high star ratings for performance quality measures.

The first incentive is a benchmark bonus that equals five percent of the plan’s benchmark payment. This bonus is double for plans that serve counties with high Medicare Advantage enrollment numbers. The second incentive is a rebate bonus where plans receive a higher percentage of their rebate if they lower their premiums.

Health plans must receive at least four stars to qualify for bonus payments.

Value-based incentive programs in traditional Medicare are typically budget-neutral or aim to reduce spending. But the Medicare Advantage quality bonus program offers significant funds to private payers, accounting for 2.3 percent of total payments to Medicare Advantage plans. In 2019, the program provided a total of $6 billion to payers.

To understand if the quality bonus program has led to improvements in Medicare Advantage plan performance quality, researchers from the University of Michigan Medical School analyzed claims data between 2009 and 2018 from Optum’s Clinformatics Data Mart Database.

They focused on nine quality performance measures, including breast cancer screenings, annual hemoglobin A1C testing, low density lipoprotein (LDL) testing, retinopathy screening, nephropathy management, adherence to statins, adherence to diabetes medications, adherence to renin-angiotensin system (RAS) antagonists, and rheumatoid arthritis management.

Researchers looked at 3.7 million Medicare Advantage members and compared their outcomes to those of 4 million commercial enrollees whose plans were not enrolled in the quality bonus program.

Before the implementation of the quality bonus program, 63 percent of Medicare Advantage members and 64.9 percent of commercial enrollees met the quality performance measures.

Following the program introduction, some of the measures in Medicare Advantage plans saw improvements but others saw decreases in performance, indicating that the program had no consistent impact on overall quality performance.

The program was associated with improved performance for adherence to RAS antagonists, hemoglobin A1C testing, LDL testing, and breast cancer screening. The improvements ranged from a 3.3 percentage point increase for RAS antagonists adherence to an 8.4 percentage point increase for breast cancer screening.

Meanwhile, rheumatoid arthritis management, adherence to statins, adherence to diabetes medication, and nephropathy management had decreased performances following the implementation of the quality bonus program. The reductions in quality ranged from 9 percentage points for rheumatoid arthritis management to 0.8 percentage points for nephropathy management.

The program was not associated with any significant changes for retinopathy screening or overall performance quality relative to commercial insurance, researchers found.

Additionally, a past study revealed that the double bonus incentive for Medicare Advantage plans in counties with high enrollment did not boost quality performance measures. The double bonus incentive may also exacerbate racial disparities, as the study found that Black beneficiaries were 9.9 percent less likely to live in counties that received these double bonus payments.

The quality bonus program may not lead to improvements in quality because health plans focus on nonclinical administrative measures, such as customer service, that contribute to star ratings and plans have more control over, the researchers suggested. Additionally, care quality is mainly dependent on clinicians and their behavior, and plans may not direct program incentives to clinicians.

Healthcare stakeholders, including the Medicare Payment Advisory Commission (MedPAC), have suggested revisions to the quality bonus program if plans are unable to produce proof that the incentives are improving performance quality.

MedPAC has proposed replacing the program with a new incentive system that focuses on population-based measures that are monitored on a continuous scale.

Further, revising the program to be budget-neutral and eliminating the benchmark bonuses could save Medicare $94 billion between 2021 and 2028, according to the Congressional Budget Office.