The Medicare Advantage bonus payment system created by the Affordable Care Act and updated last year is effective, according to separate analyses released Tuesday by Avalere Health and the Commonwealth Fund, Bloomberg Businessweek reports (Wayne, Bloomberg Businessweek, 10/16).
The Affordable Care Act authorized bonus payments to MA plans that receive a quality score of at least four stars on a five-star scale. In November 2010, CMS expanded the program to provide bonuses to plans that receive at least three stars.
The program encountered criticism from the start. Critics have said the $8 billion bonus program amounts to a "slush fund" that would partially offset $145 billion in cuts to the plans over the next decade. Some Republicans also have argued that the program is a political move to win votes in November's election.
In April, a Government Accountability Office Government Accountability Office report found that the program was unlikely to "produce meaningful results" and advised that it be canceled. The report said that most of the bonuses went to "average-performing plans" and that researchers were unable to determine whether the increased payments led to improved care (California Healthline, 8/10).
However, the Avalere analysis found that the average rating for an MA plan with drug coverage in 2013 increased to 3.66 stars on a five-star scale, up from 3.44 stars in 2012 and 3.18 stars in 2011 (Bloomberg Businessweek, 10/16). The report also found that from 2012 to 2013, 28% of MA plans and 49% of stand-alone Medicare prescription drug plans gained at least a half a star (Viebeck, "Healthwatch," The Hill, 10/16).
The analysis also found that MA plans improved on all measurement categories, including process, patient experience and access, and outcomes (Avalere release, 10/16).
The 99 plans that improved will be rewarded with higher bonus payments applied to their 2014 benchmarks and special markers on the CMS plan-finder website, the Avalere report notes ("Healthwatch," The Hill, 10/16).
Commonwealth Fund Report
Meanwhile, the Commonwealth Fund report found that the bonus payment program improved quality of care for Medicare beneficiaries, while reducing overpayments to Medicare Advantage plans by $12.7 billion annually.
The report lists three provisions in the ACA that the authors estimated will rein in Medicare spending:
- Rewarding the highest-quality MA plans;
- Setting new benchmark rates; and
- Reducing rebates to MA plans.
The Commonwealth report follows a study by the Physicians for a National Health Program that found MA plans have been overpaid $282.6 billion since 1985 (Herman, Becker's Hospital Review, 10/16).