Goodsurance

Policy & oversight

A New Analysis Says Medicare's Quality Bonus Program May Have a Structural Problem

Researchers writing in Health Affairs argue that 2026 court rulings have not merely caught a procedural error, but have exposed a deeper flaw in how Medicare rewards Advantage plans for quality.

By the Goodsurance editorial teamJuly 19, 2026

A commentary published July 17 in Health Affairs Forefront contends that the wave of 2026 litigation over Medicare Advantage star ratings points to structural weaknesses in the quality bonus program itself, not just in how CMS applied certain measures.

The legal trouble began after a federal judge ruled in May 2026 that CMS had used 20 measures in setting 2026 star ratings that were either based on data sources not authorized by the Medicare Act or adopted without proper notice-and-comment rulemaking. CMS recalculated Clover Health's rating from 3.5 to 4.5 stars following that ruling, but retained 10 of the contested measures for all other plans. That partial remedy prompted lawsuits from Elevance Health, SCAN Health Plan, and Alignment Healthcare.

The Health Affairs researchers note that about one-third of all Medicare Advantage contracts, 175 in 2026, fell below the four-star threshold needed to earn quality bonus payments. KFF found the federal government is expected to pay more than 13.4 billion dollars in quality bonuses to Medicare Advantage plans in 2026, yet the share of enrollees in bonus-eligible plans fell to 68 percent, the lowest since 2018. The researchers conclude the program is likely falling short of its objective of rewarding plans that genuinely improve care.

For beneficiaries, quality bonuses matter because plans use that money to reduce premiums or add supplemental benefits. When the bonus methodology is in legal dispute, it creates uncertainty about what each plan can offer.

In plain words

Medicare pays extra money to health plans that score well on a government rating system. A July 17 study says the system has serious problems. Courts found that many scoring rules were not written correctly. About one in three Medicare Advantage plans scored too low to get extra money in 2026. Researchers say the whole program may not be helping patients get better care. Plans use that extra money to lower costs or add benefits, so the dispute affects what members receive.

Understand the basics first

Source: Health Affairs Forefront
Read at the source →

More news

Other stories on what is moving in Medicare.

Policy & oversight

OIG Found More Than 15 Million Dollars in Medicare Payments Where Emergency Room Billing Codes Were Used at Non-Emergency Sites

A March 2026 federal audit identified improper and potentially improper Medicare payments made when physicians and hospitals used emergency department billing codes for care not actually delivered in an emergency department, and found that Medicare lacked automated safeguards to catch the mismatches.

August 8, 2026

Policy & oversight

Federal Audit Found at Least 4.7 Million Dollars in Medicare Overpayments at an Arkansas Hospital

An OIG audit of Jefferson Regional Medical Center found a high rate of billing errors on claims flagged as elevated risk, producing an estimated 4.7 million dollars in improper Medicare payments. The hospital disputed most of the findings.

August 7, 2026

Policy & oversight

CMS Publishes Plan to Speed Medicare Coverage for Breakthrough Medical Devices

A new pathway would give FDA-cleared breakthrough devices a national Medicare coverage decision within weeks of regulatory approval, rather than waiting years under the standard process.

August 7, 2026

Policy & oversight

Federal Audit Found 97 Cybersecurity Gaps in Medicare Billing Contractors for Fiscal Year 2024, Though the Most Serious Deficiencies Declined

An OIG annual report to Congress found information security deficiencies across all seven Medicare administrative contractors in fiscal year 2024, while noting that high-risk and moderate-risk gaps fell compared with the prior year.

August 6, 2026

Policy & oversight

CMS Published Second-Quarter 2026 Drug Coding Decisions That Shape How Medicare Identifies and Pays for New Medicines

The quarterly HCPCS drug coding update, posted July 29 and highlighted in the August 6 MLN Connects newsletter, determines which new medications and biologicals get a dedicated Medicare billing code.

August 6, 2026

Policy & oversight

CMS Sets a Sunset Date for the NTAP Alternative Track for Breakthrough Devices and Advances the RAPID Pathway

The fiscal year 2027 hospital payment final rule phases out the alternative NTAP track that breakthrough-designated devices used to qualify for Medicare reimbursement, while a new CMS-FDA program called RAPID is positioned to take its place.

August 5, 2026