2012 rural Medicare Advantage quality ratings and bonus payments

Key Data Findings. (1) The average rural Medicare Advantage (MA) plan enrollee in 2012 experienced a quality rating of 3.60 stars (of a potential 5.0), compared with a rating of 3.71 stars experienced by urban enrollees. (2) The measured rural-urban difference in the MA plan quality is a result of the difference in the composition of the enrollment and plan availability in MA markets, rather than differences between MA plans of the same type. (a) In general, rural Medicare beneficiaries often have limited MA plans available from which to choose, and typically have lower quality ratings than urban MA plans. (b) Rural MA beneficiaries are more likely to be enrolled in preferred provider organization (PPO) plans than in health maintenance organization (HMO) plans. (c) PPO plans have lower quality ratings on average than HMO plans. (d) HMO plans had the highest average quality rating at 3.83 and 3.78 stars, respectively, in rural and urban areas. PPO plans had lower quality ratings, at 3.52 and 3.50, respectively. (3) In rural areas, 32% of the MA population is enrolled in a plan with a star rating of 4.0 or higher, and 92% are enrolled in a plan with a star rating of at least 3.0, as contrasted to urban enrollment of 36% and 94% respectively, making these plans eligible for quality based bonus payments. (4) The quality rating of rural MA plans varies significantly across the country, with the highest quality ratings in rural areas in Minnesota, Iowa, Wisconsin, Oregon, Pennsylvania, and Maine.