Medicare Advantage Plan Double Bonuses Drive Racial Disparity In Payments, Yield No Quality Or Enrollment Improvements

Under the Medicare Advantage (MA) quality bonus payment program, initiated in 2012, MA plans with relatively high quality performance that are located in "double bonus"-eligible counties-metropolitan areas with high MA enrollment and low fee-for-service Medicare spending-receive quality bonuses twice as large as those received by equivalently high-quality plans in double-bonus-ineligible counties. Using national data for 2008-18, we found that double bonuses were not associated with either improvements in plan quality or increased MA enrollment. Additionally, because Black beneficiaries were less likely to reside in eligible counties, double bonuses increased payments to plans to care for Black beneficiaries by $60 per year, compared with $91 for White beneficiaries. Our findings suggest that double bonuses not only fail to improve quality and enrollment but also foster a racially inequitable distribution of Medicare funds that disfavors Black beneficiaries. Our study supports eliminating double bonuses, thereby saving Medicare an estimated $1.8 billion per year.