The Affordable Care Act requires CMS to make Quality Bonus Payments (QBPs) to MA organizations that achieve at least four stars in a five-star quality rating system. The QBP demonstration finalized in the CMS 2012 Call Letter is testing whether providing scaled bonuses to MA organizations with three or more stars will lead to more rapid and larger year-to-year quality improvements in their quality scores, compared to the current law bonus structure. For contracts at or above three stars, QBPs were computed along a scale; the higher a contract’s star rating, the greater the QBP percentage. Although there was little change in MA plans’ performance on quality measures between 2008 and 2010, beginning in 2011, a larger number of measures have shown improvement in comparison with previous years.29 Table 3 shows that in 2014, over half of all MA enrollees were enrolled in plans with four or more stars, which represents a significant increase from the 24 percent of enrollees who were in such plans in 2011 and the 37 percent of enrollees who were in such plans in 2013. Additionally, over one-third of MA contracts have four or more stars in 2014, compared to 14 percent in 2011.30 31
Trends in Medicare Advantage (MA) 5-Star Quality Ratings, 2011-2014
|Percentage of MA Contracts With 4 or More Stars||14%||24%||28%||38%|
|Percentage of MA Enrollees in Plans With 4 or More Stars||24%||29%||37%||53%|
Notes: Percentages are based on the total number of contracts with a quality rating.
Source: Centers for Medicare & Medicaid Services.
29 Medicare Payment Advisory Commission, “The Medicare Advantage Program: Status Report,” Chapter 12, Report to the Congress: Medicare Payment Policy, March 2012..
30 Centers for Medicare & Medicaid Services, “More, higher quality options for seniors in Medicare Advantage,” Press Release, September 19, 2013, accessed at http://www.hhs.gov/news/press/2013pres/09/20130919b.html.
31 CMS calculates star ratings from 1 to 5 (with 5 being the best) based on quality and performance for MA and Medicare prescription drug plans to help beneficiaries, their families, and caregivers compare plans.