Medicare Advantage’s (MA) quality bonus program (QBP) pays plans based on a quality-based star rating system. However, issues with the QBP contribute to overpayments in MA and can exacerbate health disparities.

HOW WE DID IT

In this analysis, we use publicly available data from the Centers for Medicare & Medicaid Services to enhance understanding of the QBP, including its design, issues around increases in star ratings, differences in access to high-quality plans, growth in QBP payments over time, and variations in QBP payments per enrollee. We also examine county- and state-level changes in QBP payments.

WHAT WE FOUND

We find average star ratings and QBP payments per enrollee increased from 2015 to 2023, substantially boosting payments to MA plans. In 2023, QBP payments totaled $12.9 billion. Although other value-based payment programs in Medicare are budget-neutral, the QBP only provides bonuses and does not include any penalties for poor performance to balance the substantial rewards it provides to MA plans. We also find differences in enrollment by enrollee socioeconomic characteristics between higher- and lower-scoring MA plans, which means that QBP bonus payments disproportionately go to contracts with more advantaged beneficiaries. In addition, we find geographic differences in access to higher-scoring plans, so some beneficiaries do not have access to the additional benefits funded by QBPs. Furthermore, there have been substantial shifts in QBP payments across states over this period.