Health Care Updates

Carney, Sebelius Defend Medicare Bonus Demonstration Against GAO Report.

ABC News  /OTUS News (4/24, Tapper) reports on its website, “The White House Monday downplayed a Government Accountability Office report calling into question the effectiveness of bonuses distributed in a $8.3 billion demonstration program for Medicare Advantage.” While “the GAO recommended that Health and Human Services Secretary Kathleen Sebelius cancel this bonus payment system … White House press secretary Jay Carney immediately changed the subject to the $200 billion in projected savings from eliminating improper payments under the health care law,” saying that “it was important to put the $8.3 billion ‘in context …And in fact we’re phasing out over $200 billion in overpayments to Medicare Advantage plans on schedule.'” Sen. Orrin Hatch (R-UT) said that the bonus payment project “raises serious questions about the Obama Administration’s use of taxpayer dollars for political purposes,” adding that it “raises serious questions about whether the purpose of this demonstration was to mask the health spending law’s cuts to seniors’ Medicare benefits for political purposes.”

The Washington Times  (4/24, Cunningham) reports that the GAO report found “that the administration is wasting billions on extra bonuses for health plans and should cancel them right away, fueling Republican complaints that President Obama is trying to postpone his health care law’s unpopular Medicare cuts until after the election,” and that “the bonuses will cost…almost three times what was intended.” The story cites Sen. Hatch saying, “This is simply unacceptable.” It also quotes Carney saying, “This demonstration project is simply a way to, we believe, ensure that these programs are as cost-efficient as possible.”

The Hill  (4/24, Viebeck) reports in its “Healthwatch” blog that GAO found the program “is an $8 billion waste of money,” and “vindicated Republicans who have called the administration-backed initiative providing bonuses to certain insurers an extravagant political ploy.”

Appearing on CNBC’s The Kudlow Report (4/23), former HHS assistant secretary Benjamin Sasse, who, along with Charles Hurt, authored an op-ed for the New York Post  (4/23) reported on yesterday, said, “About a quarter of seniors in America are on a private insurance plan that they opt into, as opposed to the traditional public plan. The President and the Administration are opposed to these private insurance plans, and so one of the ways they came up with money to pay for Obamacare is by cutting these plans, but they decided they don’t want the American people, grandma in particular, to know about it until after the election. … The government’s reimbursement rate to these private plans for senior citizens would be cut dramatically in 2013,” and “seniors would learn about it on October 15th, about three weeks before the election under current law.”

CQ  (4/24, Norman, Subscription Publication) reports that the GAO said that the program “should be canceled…in a highly critical report  (pdf).” The program “run by the Centers for Medicare and Medicaid Services (CMS) costs so much that it offsets much of the savings from private health plans that were included in the health care law.” The program “already has drawn strong doubts from members of the independent Medicare Payment Advisory Commission as well as congressional Republicans.” In response, “CMS officials said they would not cancel the demonstration project for Medicare Advantage plans and expressed disagreement with GAO’s findings.” Jim R. Esquea, assistant secretary for legislation at HHS, said, “CMS believes the demonstration supports our national strategy to improve the delivery of health care services, patient outcomes and population health.”

CNN Money  (4/24, Barbieri, Sahadi) reports that “HHS Secretary Kathleen Sebelius said Monday that before the new health care reforms were passed, Medicare overpaid private insurers to the tune of 114% above Medicare rates, and lacked any power to assure the care was high quality. She said that, with the program, Medicare is overpaying private insurers by 107% and more beneficiaries have been switching to higher-rated plans.” Sebelius said, “With the demonstration, we’re on track to reduce overpayments,” adding, “I think it’s a basic win-win-win situation. We’ve got lower rates, we’ve got better-quality plans, and we’re on track to reduce the overpayments in the long run.”

McKnight’s Long Term Care News  (4/24) reports, “The Affordable Care Act will help Medicare save over $200 billion through 2016, according to government actuaries. But questions as to Medicare’s long-term solvency remain, another report from Social Security and Medicare Boards of Trustees states.” Meanwhile, “a Government Accountability Office report also released Monday urged Health and Human Services Secretary Kathleen Sebelius to cancel an $8-billion Medicare Advantage demonstration program that used quality bonuses to improve managed care for seniors.”

WSJournal Calls Bonus Program Part Of The President’s Reelection Effort. The Wall Street Journal  (4/24, Subscription Publication) in an editorial says that the President has engaged in a number of actions intended to further his reelection prospects that violate his own policy goals. As examples the editorial mentions the postponement of a new EPA ozone rule, and extending tax cuts, but focuses its attention on the bonus program which it says serves the purpose of delaying cuts to Medicare Advantage plans until after the election this November. The paper says that the GAO report suggests that the demonstration program has no value as such and that it is being conducted purely for political ends. The paper says the cost of the program should be reported as a contribution to the President’s reelection campaign.

The Boston Herald  (4/24) in an editorial says, “The bad news just kept coming yesterday for the nation’s Medicare program – with no help in sight from an administration that substitutes economic sleight of hand for real reform.” Also, “there was more evidence yesterday of administration malfeasance on Medicare with the release of a report by the Government Accountability Office on an $8.3 billion ‘experimental’ program run out of Health and Human Services,” which the editorial explains is “what happens when you throw money at plans just to cover your political backside until after Nov. 6.”