What We’re Reading – GAO recommends ending CMS bonus payment demonstration

From the GAO.gov website and different healthcare news websites.

The Government Accountability Office (GAO), a nonpartisan investigative arm of Congress, recommends that CMS should discontinue its quality bonus program demonstration. The reasons are the budgetary impact, lack of data to assess results, and concerns that it rewards providers of medicare health care, according to a report released by GAO on April 2012.  The report suggested that CMS implement the Medicare Advantage bonus payment system authorized by the Patient Protection and Affordable Care Act (PPACA).

The estimated budgetary impact of the bonus program demonstration would be seven times larger than that of any Medicare demonstration since 1995, because the payments are larger than those mandated by the PPACA.  The PPACA mandates bonuses for health plans that achieve a star rating of 4 or higher instead of the demonstration project’s bonuses for star ratings as low as 3.  The GAO report estimates that under the PPACA bonus system, about one third of MA beneficiaries would be covered by plan sponsors eligible for a bonus payment, whereas under the demonstration system, about 90% of beneficiaries would be covered.

CMS responded that the quality bonus payment demonstration program’s design is consistent with the overall goal of improving quality in the Medicare Advantage program and does not preclude a credible evaluation of the demonstration. Absent this demonstration, CMS believes that many plans would not have the incentive to improve quality of care delivered to MA enrollees.

The concern about lack of data stems from the fact that in 2012 and 2013, bonus payments are based on data collected before the final specifications of the demonstration were released on April 2011. As a result, 2014 would be the only year that CMS could evaluate the results of the demonstration program. This means that bonuses for the demonstration project would be paid without adequate comparison data. Furthermore, the rollout of the demonstration program to all MA plans precludes having a comparison group that could isolate the effects of the demonstration and allow for unbiased evaluation.

CMS conceded the point and will evaluate the demonstration by looking for comparison group outside the MA program, such as plans that contract with Medicare under section 1876, which are cost contracts or those participating in commercial and Medicaid CAHPS and HEDIS programs.

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