The Medicare Advantage Quality Bonus Program Has Not Improved Plan Quality

Abstract

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.

Exhibit 2:

Event study of differential changes in quality performance between Medicare Advantage (MA) beneficiaries and commercial insurance enrollees Source/Notes: SOURCE Authors’ analysis of 2009–18 Optum Clinformatics Data Mart Database and census data. NOTES The event-study shows the difference in the estimated probability of a given quality measure being met in each year for MA versus commercial enrollees, before and after the start of the quality bonus program. These trend-adjusted event-study models are described in the main text. pp is percentage points. LDL is low-density lipoprotein. RAS is renin-angiotensin system.

Exhibit 3:

Association between the quality bonus program and Medicare Advantage quality performance Source/Notes: SOURCE Authors’ analysis of 2009–18 Optum Clinformatics Data Mart Database and census data. NOTES The association between the quality bonus program and differential changes in quality performance is shown, with 95% confidence intervals. Differential changes were estimated using trend-adjusted difference-in-differences models that are described in the main text. RAS is renin-angiotensin system. LDL is low-density lipoprotein. pp is percentage points.