GAO Says Time to Call it Quits on Medicare Advantage Program

The Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) are under close scrutiny from the Government Accountability Office (GAO) after failing to meet principles set in place in the original statute of the HHS Medicare Advantage (MA) Quality Bonus Payment Demonstration, according to a letter from the GAO. 

In the letter, dated July 11, 2012, the GAO advises the MA Quality Bonus Program Demonstration be terminated due to CMS and HHS’s inability to follow original program guidelines which now result in a program cost of $8 billion. Medicare Advantage Plans can cover services associated with home health care. 

The original 2010 program established by the Patient Protection and Affordable Care Act planned to award bonus payments to MA plans under contract with CMS demonstrating the highest quality performance on a five star scale each year. Plans that achieved 4, 4.5 or 5 stars would receive 1.5%, 3%, and 5% bonus payments from 2012-2014 respectively. 

CMS, however, chose to implement a tiered incentive program that extends bonuses to 3 and 3.5 star plans. Their program offers incentives ranging from a 3% bonus to 3 star plans to a 5% bonus for 5 star plans. 

The augmented program’s cost of $8 billion and the decision to include average performing MA plans in the bonus payment program were the GAO’s main concerns and its motivations behind advising HHS to terminate the program. 

According to the GAO’s letter, the current CMS run program is not proving to increase the efficiency or economy of MA plans, the original goal of the MA Quality Bonus Payment Demonstration.  

The Medicare Advantage Plan combines services covered by both Medicare Part A and Medicare Part B. This coverage plan includes home health care, nursing care, hospital care, and Medicare Part B’s portion of medical insurance. 

Read the letter here

Written by Erin Hegarty