GAO: Cancel Medicare Advantage demo that squandered $8B

The Government Accountability Office is calling for an end to what it says is an ineffective Medicare Advantage bonus program, which has wasted more than $8 billion, The New York Times reported.

The Medicare Advantage Quality Bonus Payment Demonstration, which would cost $8.3 billion over 10 years, with 80 percent of the cost occurring in the first three years, has thus far yielded mediocre care and is unlikely to produce results, the GAO said in its sharp criticism of the experimental project, reported the NYT.

As an alternative to the traditional healthcare program for seniors, Medicare Advantage is a popular private insurance with more than 3,000 private plans that serve about 12 million beneficiaries, the Associated Press reported. The demonstration project under the Obama administration, however, dolls out most of the bonus money to plans that receive only 3 to 3.5 stars out of 5 on Medicare's rating scale.

The GAO called for the cancellation of the project, as it's the costliest demonstration in Medicare history, the AP reported.

The Centers for Medicare & Medicaid Services fought back, stating that the demonstration supports the national strategy to improve care, patient outcomes and population health and explained the reasoning for the bonus structure for even the average performers.

The demonstration project tests to see if plans with quality ratings lower than 4 stars that earn bonus payments will result in efficiency and better care, CMS noted.  

"The changes made under the demonstration project provide financial incentives for quality improvement and reward improvement throughout the ratings continuum," CMS said.

To learn more:
- read the NYT article
- here's the AP article
- check out the GAO report (.pdf)

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