The CMS launched the nationwide demonstration program administratively in November 2010 to replace a similar quality-incentive plan for the private insurance plans that cover about a quarter of Medicare's beneficiaries, which was authorized by the Patient Protection and Affordable Care Act. The replacement program will cost about $5.3 billion more than the one original one, GAO concluded.
The bonus program's 10-year cost also is more than the combined cost of all CMS pilot programs implemented since 1995, the report found.
The GAO concluded that the program's design disallows any effort to determine if it will have any effect on its stated goal of spurring larger and faster quality improvements than the program authorized by the 2010 healthcare law.
“Moreover, because the demonstration lacks a direct comparison group, it may not be possible to isolate its effects, and any effects that are observed could be attributable, at least in part, to other MA payment and policy changes,” the report says.
The GAO recommended canceling the program and replacing it with the bonus program authorized by the federal healthcare law.
Sen. Orrin Hatch (R-Utah), who requested the report, said it indicates the administration used the program to temporarily mask the first rounds of cuts to Medicare Advantage programs mandated by the healthcare law.
“The Obama administration seems to be using a technicality to side-step Congress and write itself a blank check to spend more money for political purposes leading into this year's elections,” he said in a news release. “The White House does not have the authority to green light spending on whatever program it wants.”