Rural Medicare Advantage Plan Payment in 2015.

Area of Science:

• Health Policy
• Health Economics
• Medicare Advantage

Background:

• The Patient Protection and Affordable Care Act (ACA) of 2010 significantly altered Medicare Advantage (MA) plan payment structures.
• MA plans transitioned to new county-level payment area benchmarks and introduced quality-based bonus payments starting in 2012.

Purpose of the Study:

• To examine the impact of ACA-driven changes in MA baseline payments on MA plans and beneficiaries in rural and urban settings.
• To analyze the reduction in quality-based bonus payments following the Medicare Advantage Quality Bonus Payment Demonstration.

Main Methods:

• Comparative analysis of hypothetical pre-ACA payment benchmarks versus actual ACA-mandated benchmarks for 2015.
• Examination of per-enrollee bonus payments for MA plans in rural areas between 2014 and 2015.
• Assessment of the proportion of rural MA beneficiaries in plans receiving quality-based bonus payments before and after the demonstration.

Main Results:

• In 2015, ACA payment policies resulted in 3.9% lower payments for rural MA plans and 8.8% lower payments for urban MA plans compared to pre-ACA scenarios.
• Average annual bonus payments per enrollee for rural MA plans dropped from $326.77 in 2014 to $63.76 in 2015.
• The percentage of rural MA beneficiaries in plans receiving quality bonuses decreased from 92% in 2014 to 56% in March 2015.

Conclusions:

• The ACA's payment reforms have led to reduced baseline payments for MA plans in both rural and urban areas, with urban areas experiencing a larger reduction.
• The conclusion of the Medicare Advantage Quality Bonus Payment Demonstration significantly decreased bonus payments and the proportion of beneficiaries covered by them, particularly impacting rural enrollees.