Cancel Medicare Advantage Demo, Says GAO

A report released Monday by the Government Accountability Office says that a Medicare bonus program to reward high-performing health plans is expensive, poorly run, and should be cancelled.

The report notes that the Medicare Advantage (MA) Quality Bonus Payment Demonstration program will pay out $8.4 billion over 10 years with much of that money going to health plans that perform at only an average level.

The GAO contends that the demo, set up in November 2010, is simply a back-door way to restore to health plans some of the reduced Medicare payments included in the ACA.

In comments included in the report, the Centers for Medicaid & Medicare Services counters that the project supports the triple aim of healthcare?better care, better health, and lower cost. Without the demo, many plans wouldn't have an "immediate incentive to improve the quality of care delivered to Medicare Advantage enrollees," says CMS.

The five-star rating program, created to help monitor Medicare Advantage plan performance, has been around since 2007, but began to generate real interest among health plans when the bonus payments for four and five star health plans were added to the Patient Protection and Affordable Care Act in March 2010. The rating system is based on more than 40 quality measures, including preventive screenings and managing chronic conditions.