The MA Quality Bonus Payment Demonstration is an alternative method for calculating and awarding payment bonuses to MA health plans — the managed care option for Medicare beneficiaries.
Under the Patient Protection and Affordable Care Act, MA payments would have been tied to the quality rating of the health plan. For example, only the highest-rated MA plans that have shown high clinical quality and patient experience (four- and five-star plans) would have received bonuses, while lower-rated plans would have received nothing with the expectation of improving quality. However, in November 2010, CMS introduced the MA Quality Bonus Payment Demonstration instead of instituting the PPACA’s plan. This demonstration extended the bonuses to average-rated plans, accelerated the phase-in of the bonuses and increased the size of the bonuses.
CMS said the point of the demonstration was to test whether a scaled bonus structure would lead to larger and faster quality improvement for many plans at various star-rating levels (including lower-rated plans) compared with what would have been done under the PPACA.
CMS’ Office of the Actuary estimated PPACA’s payment reforms on MA plans would have reduced Medicare payments to those plans by $145 billion over nine years and would have hypothetically promoted quality improvement. The GAO said the MA Quality Bonus Payment Demonstration actually undermines “its ability to achieve CMS’ stated research goal,” according to the report.
The GAO recommended an end to the project because it offsets a large portion of the PPACA’s MA payment reductions between 2012 and 2014 and because many of the average MA plans will accrue bonus payments without having to produce meaningful quality results.
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