CMS will pay Medicare Advantage plans $12.8 billion in bonus payments in 2023, according to a KFF analysis published Aug. 9.
The agency will pay $2.8 billion more in bonus payments in 2023 than in 2022, a nearly 30 percent increase, according to KFF. The amount CMS spends on bonus payments has quadrupled since 2015.
The increase is partly driven by a higher share of enrollees in plans rated four stars or higher for quality by CMS. In 2015, 55 percent of Medicare Advantage beneficiaries were enrolled in plans with four or more stars, compared to 85 percent in 2023.
The average payment per enrollee has also increased, rising from $184 in 2015 to $417 in 2023.
Plans can use quality bonus payments to cover the costs of services not provided by fee-for-service Medicare, like supplemental benefits; reduce cost-sharing; or to provide rebates on Medicare Part B and D premiums.