Payments lower to Medicare Advantage plans in rural areas

Faculty; Policy; Public Health; Research

Overall payments to most rural Medicare Advantage plans under the Affordable Care Act have been reduced despite the fact that quality-based bonus payments were added, according to research from the Brown School at Washington University in St. Louis and the University of Iowa College of Public Health.

Medicare Advantage is the U.S. government-run program that provides health insurance plans to Medicare beneficiaries through private companies. Beginning in 2010, the ACA phased in changes, including bonus payments that rewarded high-quality plans.

Researchers found that payments to rural plans fell by 3.9 percent in 2015 and that far fewer beneficiaries were in a plan eligible for quality-based bonus payments than in 2014.

“Plans operating in many rural areas do not have the same monetary incentives to improve quality as those in most urban areas because they are not eligible to receive the quality-based bonus payments due to both lower quality scores and payment caps,” wrote Leah Kemper, PhD., of the Brown School, the lead author.

“If the ACA quality-based bonus payments do not prove to be an effective tool in improving MA plan quality in rural areas, alternative rural-targeted incentives may need to be explored.”

The brief was published in December by the Center for Rural Health Policy Analysis. Other authors include Dr. Timothy McBride, Professor at the Brown School; Dr. Abigail Barker of the Brown School and Dr. Keith Mueller, Professor at the University of Iowa.