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Medicare Blog | Medicare News | Medicare Information

GAO Calls for End of Medicare Advantage Bonus Program

Posted by Lauren Hidalgo on Fri, Apr 27, 2012 @ 09:43 AM

Medicare SupplementsThis week government auditors called for a cancellation of an $8.3 billion dollar Medicare program that some congressional Republicans think is a political ploy by the Obama administration. The money is going toward a three-year project intended to make quality improvements to Medicare Advantage plans and financially reward those plans that are scoring well by the Department of Health and Human Services. However the Government Accountability Office (GAO), the investigative agency of Congress, uncovered that the plan’s spending "dwarfs" all other Medicare pilots undertaken in the last 20 years. Plus, they found the majority of the money is going to plans earning only three to three-and-half stars, an "average" score.

Available through 2014, these quality bonuses to Medicare Advantage plans will postpone the drastic cuts Medicare Advantage plans will be faced with under the new health care law. However, the GAO questions whether the bonus program will actually be an incentive to promote quality in insurance providers. Defending the bonuses, the Health and Human Services Department issued a statement saying, "the demonstration supports our national strategy to improve the delivery of health care services, patient health outcomes, and population health."

Orrin Hatch, the ranking Republican on the Senate panel which oversees Medicare, questioned if the administration had the legal authority to create the program. Hatch stated, "The White House does not have the authority to green-light spending on whatever program it wants. This report is just the beginning — I will be demanding answers."

Hatch also questioned the Obama administration’s use of a technicality in order to sidestep Congress and "write itself a blank check to spend more money for political purposes leading into this year’s elections." He and other congressional Republicans see the spending as a way to appease seniors, a key constituency of swing voters during this election year.

The Medicare Advantage bonus program is the costliest in Medicare history, with money coming from the Medicare trust fund. Next week the Medicare trustees will be releasing their annual report on the status of the program, which is already facing a long-term financial crunch.


Please give us your feedback!
Do you think President Obama is misusing the $8.3 billion for his own agenda of being re-elected this year? Or do you think the bonus plan is a good incentive to make Medicare Advantage companies to take better care of their policyholders?

Source: CNN, Herald-Tribune

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