Health Affairs recently published an article that found the effectiveness of the Medicare quality bonus program was limited. The study, conducted by Adam A. Markovitz, John Z. Ayanian, Devraj Sukul and Andrew M. Ryan, was done by analyzing insurance claims from 2009 to 2018 from the nation’s largest Medicare Advantage (MA) claims database. The database included 3,753,117 MA beneficiaries (treatment group) and 4,025,179 commercial enrollees (control group). Using a difference-in-differences framework, the study authors evaluated changes in performance on nine claims-based measures of quality in both groups before and after the start of the bonus program and with adjustment for differential pre-period trends.
MA plan quality has been publicly reported in a star-ratings system since 2007. Plans are rated from one to five stars based on its performance among many different factors relating to preventative care, chronic disease management, patient experience, and more. Then in 2012, Medicare introduced a quality bonus program that connected commercial insurers’ quality performance in the MA program to financial bonuses.
However, the quality bonus program differed from other value-based initiatives in Medicare, as it sets aside additional funding (it is not budget-neutral or lower spending). According to the Medicare Payment Advisory Commission (MedPAC), the incentives totaled $6 billion in 2017.
The level of investment has made the program somewhat of a lightning rod for criticism. Some believe that despite the significant investment made by the government in the program, it isn’t as effective as it should be (or as it was intended).
The authors of the new study found that plan participation was associated with: significant quality improvements among MA beneficiaries on four measures, significant declines on four other measures, and no significant change in overall quality performance (+0.6 percentage points). Together, the authors concluded that the quality bonus program did not produce the intended improvement in overall quality performance of MA plans.
What’s to Come?
The conclusion from the study adds to the evidence used by certain stakeholders, who are calling for a significant revision (or altogether elimination) of the program. One such study was published in November 2019, which also found that the quality bonus program was associated with either minor or no changes in quality.
During the April 2019 MedPAC meeting, MedPAC analysts found that the MA star ratings system wasn’t serving its intended purpose of informing beneficiaries about quality. They proposed a new MA value incentive program to address certain deficits in the current rewards model and move it toward budget neutrality.
With this study renewing the criticism against the MA quality bonus program, we will have to keep an eye on this space to see if it will bring about change that some groups have been asking for for several years.