Medicare Advantage Plan Double Bonuses Drive Racial Disparity In Payments, Yield No Quality Or Enrollment Improvements

Legislative and Regulatory Options for Improving Medicare Advantage

The Medicare Advantage program was created to expand beneficiary choice and to reduce spending through capitated payment to private insurers. However, many stakeholders now argue that Medicare Advantage is failing to deliver on its promise to reduce spending. Three problematic design features in Medicare Advantage payment policy have received particular scrutiny: (1) how baseline payments to insurers are determined, (2) how variation in patient risk affects insurer payment, and (3) how payments to insurers are adjusted for quality performance. The authors analyze the statute underlying these three design features and explore legislative and regulatory strategies for improving Medicare Advantage. They conclude that regulatory approaches for improving risk adjustment and for recouping overpayments from risk-score gaming have the highest potential impact and are the most feasible improvement measures to implement.

Association of Medicare Advantage Star Ratings With Racial and Ethnic Disparities in Hospitalizations for Ambulatory Care Sensitive Conditions

BACKGROUND

Enrollment in high-quality Medicare Advantage (MA) plans, measured by a 5-star quality rating system, was lower among racial and ethnic minority enrollees than White enrollees partly due to fewer high-quality plans available in their counties of residence. This may contribute to racial and ethnic disparities in ambulatory care sensitive condition (ACSC) hospitalizations.

OBJECTIVE

We examined whether there were racial and ethnic disparities in ACSC hospitalizations among MA enrollees overall and by star rating.

METHODS

Using the Medicare enrollment and claims data for 2016, we identified White, Black, Hispanic, and Asian/Pacific Islander enrollees in MA plans. We estimated racial and ethnic disparities in ACSC hospitalizations (per 10,000 enrollees) overall and by star rating.

RESULTS

We found that the adjusted rates of ACSC hospitalizations were significantly higher among Black enrollees than White enrollees overall [39.4 (95% confidence interval: 36.3-42.5)]. However, no significant disparities were found among Hispanic and Asian/Pacific Islander enrollees. The adjusted rates of ACSC hospitalizations were higher in lower-rated plans than higher-rated plans in all racial and ethnic groups. The significant disparities in ACSC hospitalizations by star rating were the most pronounced between White and Black enrollees. We found suggestive evidence that enrollment in lower-rated plans was associated with higher disparities in ACSC hospitalizations between White and Black enrollees.

CONCLUSIONS

Substantial disparities in ACSC hospitalizations exist between White and Black enrollees in MA plans, especially for lower-rated plans. Policies aimed at reducing racial disparities in ACSC hospitalizations could include improving access to high-rated plans.

Association Between Double Bonuses and Clinical and Administrative Performance in Medicare Advantage

This cross-sectional study compares double bonuses with clinical and administrative performance in Medicare Advantage facilities.

The Medicare Advantage Quality Bonus Program Has Not Improved Plan Quality

In 2012 Medicare introduced the quality bonus program, linking financial bonuses to commercial insurers' quality performance in Medicare Advantage (MA). Despite large investments in the program, evidence of its effectiveness is limited. We analyzed insurance claims from the period 2009-2018 from the nation's largest MA claims database for 3,753,117 MA beneficiaries (treatment group) and 4,025,179 commercial enrollees (control group). Using a difference-in-differences framework, we 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. We observed no consistent differential improvement in quality for MA versus commercial enrollees under the quality bonus program. Program 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, these results suggest that the quality bonus program did not produce the intended improvement in overall quality performance of MA plans.