A recent study found that double bonuses for Medicare Advantage (MA) plans are not an efficient mechanism to improve the program, and are not equitable in allocation of those dollars, disproportionally benefiting White beneficiaries relative to Black beneficiaries, without improving quality or enrollment. The report “Medicare Advantage Plan Double Bonuses Drive Racial Disparity In Payments, Yield No Quality Or Enrollment Improvements,” was published in September 2021 Health Affairs.
The Health Affairs study describes double bonuses in the MA program: “An unusual feature of the MA bonus program is the delineation of ‘double-bonus’ counties. In these counties, higher-quality plans receive certain MA bonuses at double the dollar level paid to comparably performing plans in counties that are ineligible for double bonuses. Through the ACA, Congress created three criteria that a county must meet to be eligible for double bonuses: historically high MA enrollment (at least 25 percent in 2009); low Medicare fee-for-service spending (below the national average in a given year); and a 2004 ‘urban floor’ designation, given to Metropolitan Statistical Areas (MSAs) with at least 250,000 residents that qualify for the minimum MA benchmark rate and granted to areas with low fee-for-service spending. Although the proportion of counties qualifying for double-bonus status is small, at around 7 percent of counties nationally, the impact of their double bonus status is large because 27 percent of MA beneficiaries live in them, based on our analysis of Medicare data.”
The study found that Black beneficiaries were substantially less likely to reside in counties offered double bonuses than White beneficiaries, contributing to racial disparities in the allocation of double bonus dollars, disfavoring Black beneficiaries. The study notes that because CMS expects some of the quality bonus payments to be passed on to beneficiaries through assistance with Medicare premiums or additional benefits, differences in the allocation of MA bonus payments to counties that are eligible and not eligible for double bonuses could result in racial and geographic disparities. These could include difference in availability of enhanced benefits, or “translate to higher premiums for the same benefits when offered to primarily Black versus primarily White populations, which could harm the financial well-being of Black beneficiaries.”
Another report released this week also raises questions about MA payments. HHS OIG’s report, “Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments,” reviews risk-adjusted payments to Medicare Advantage companies. The report was undertaken “because of concerns that MA companies may leverage both chart reviews and HRAs to maximize risk adjusted payments, without beneficiaries receiving care for those diagnoses.”
The OIG report’s recommendations:
“CMS should (1) provide oversight of the 20 MA companies that had a disproportionate share of the risk-adjusted payments from chart reviews and HRAs; (2) take additional actions to determine the appropriateness of payments and care for the 1 MA company that substantially drove risk adjusted payments from chart reviews and HRAs; and (3) perform periodic monitoring to identify MA companies that had a disproportionate share of risk adjusted payments from chart reviews and HRAs. To assist CMS with its efforts, we will provide information on which companies had a substantially disproportionate share of risk adjusted payments from diagnoses that were reported only on chart reviews and/or HRAs. CMS neither concurred nor nonconcurred with our three recommendations and stated that it will take our recommendations under consideration as part of its ongoing process to determine policy options for future years.”
September 23, 2021 – K. Kertesz