The Affordable Care Act mandates quality bonus payments (QBPs) to Medicare Advantage (MA) plans earning quality ratings of at least four out of five stars. To strengthen incentives for quality improvement, CMS is implementing a demonstration that extends bonus payments to three-star plans, accelerates the phase-in of QBPs, and eliminates the cap on blended county benchmarks that would otherwise limit QBPs. The demonstration will begin in 2012.

CMS has contracted with L&M, and our subcontractors Mathematica Policy Research and the George Washington University, to evaluate the QBP demonstration. The four-year evaluation will include a mix of quantitative and qualitative research activities, including data analyses of plan quality indicators and other CMS data sources, a telephone survey of MA organizations, and case studies with selected MA organizations. Specifically, the evaluation seeks to:

• Identify trends in quality improvement under the demonstration, including which domains and measures are most affected and which types of plans show the most improvement
• Explore beneficiary enrollment patterns to determine whether beneficiaries enroll in plans with high ratings and which domains are associated with changes in enrollment
• Understand MA organizations' responses to the demonstration, including how MA organizations calculate the investment in quality improvement versus expected payoff under the demonstration, which types of quality improvement activities they engage in, and whether they market their success under the demonstration