However, the study notes concerns about the rating system’s methodology and equity issues in the distribution of bonuses across different plan types and firms. UnitedHealthcare received the largest share of payments, while average payments per enrollee varied significantly.
The quality bonus program, established by the Affordable Care Act, increases Medicare payments to Medicare Advantage plans based on a five-star rating system. Plans may, but are not required to, use the additional payments to cover the cost of supplemental benefits, including reduced cost sharing, extra benefits not covered by traditional Medicare (e.g., vision, hearing and dental), and lowering Part B and/or Part D premiums. The quality bonus program is intended to help consumers make informed decisions when choosing among Medicare Advantage plans and encourage plans to compete based on quality. However, the Medicare Payment Advisory Commission (MedPAC) and others have observed that the star ratings incorporate too many measures, do not adequately account for social risk factors, and may not be a useful indicator of quality because star ratings are reported at the contract rather than the plan level.
This analysis examines trends in bonus payments to Medicare Advantage plans, enrollment in plans in bonus status (plans that qualify for a benchmark increase based on their quality star rating), and how these measures vary across plan types and firms using publicly available information on Medicare Advantage enrollment, payment rates, and quality ratings.
Biniek, J. F., Freed, M., Damico, A., & Neuman, T. (2024, September 11). Medicare Advantage quality bonus payments will total at least $11.8 billion in 2024 | KFF. KFF. https://www.kff.org/medicare/issue-brief/medicare-advantage-quality-bonus-payments-will-total-at-least-11-8-billion-in-2024/
KFF: Insurers set to rake in $11.8B in Medicare quality bonus payments for 2024. (2024, September 16). Fierce Healthcare. https://www.fiercehealthcare.com/payers/kff-insurers-set-rake-118b-medicare-quality-bonus-payments-2024
Improve Medicare Advantage reimbursements with payer contract management that puts payer rules in the hands of clinicians & billers.
