Healthcare Business News

Lawmakers press CMS official on Advantage plan bonus pilot

By Rich Daly
Posted: July 25, 2012 - 3:00 pm ET

The CMS official overseeing a controversial Medicare insurance pilot program told a congressional panel that he has seen anecdotal evidence that it is working. But that evidence is based “not on a scientific model.”

Jonathan Blum, director of the Center for Medicare at the CMS, testified Wednesday before the House Oversight and Government Reform Committee about an $8.3 billion demonstration program—by far the largest in the agency's history—for Medicare Advantage insurance plans. He was responding to the conclusion of the nonpartisan Government Accountability Office that the program lacked statutory authority and basic design elements to achieve its goals of improved quality and lower costs to Medicare. The demonstration aims to test whether its system of bonus payments to insurance plans yields larger and faster quality improvement than would have occurred otherwise.

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“I can say based on anecdotes we've seen a dramatic change in health plans, how health plans participate in the program and their overall commitment to beneficiaries,” Blum said.

Blum was repeatedly pressed by members of both parties to provide evidence that the program is meeting its goals, but he generally responded that a comprehensive assessment would not occur until the three-year pilot is completed.

“What I'm sure I heard you say is that you've got to spend $8.3 billion to find out if it is going to work after GAO said it's a bad plan that was unlikely to bear any positive fruit,” Rep. Darrel Issa (R-Calif.), the panel's chairman, said.

Issa and other Republicans have charged that the program was launched to cover pre-election cuts to the plans required by the Patient Protection and Affordable Care Act. He plans to press for further details about the process the administration used to approve the demonstration program.

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