Medicare Advantage Quality Bonus Payment Demonstration

CMS in November 2010 announced that it would use an alternative method for computing quality bonuses. Under its broad authority to create and fund demonstration projects, CMS has set up a Medicare Advantage Quality Bonus Payment Demonstration project. In this demonstration, plans with as few as three stars (average performance) may qualify for bonus payments. Increases will vary based on the number of stars received from 3 percent for those with three stars to 5 percent for those with five stars. The project will run from 2012 to 2014. CMS estimates it will increase Medicare spending by $6.7 billion over three years, with the funds to come from the Medicare trust fund.