Tulsa World: Medicare Advantage Program Payments Criticized as Political Ploy

Tulsa World - By Wayne Greene

The Obama administration is covering up the Affordable Care Act's true financial impact on elderly Americans with an unauthorized and politically motivated bailout of the Medicare Advantage program, the chairman of the House Oversight and Government Reform Committee alleged Wednesday.

"It is not the program" that is under question, said Rep. Darrell Issa, R-Calif., in a U.S. Capitol hearing broadcast on the Internet. "We would like Medicare Advantage to succeed. It is, in fact, the president using $8.3 billion of unappropriated funds to buy an election" that is the issue.

Rep. James Lankford, R-Okla., who is a member of the committee, also questioned the administration's decision to spend billions on a demonstration project that will temporarily shield Medicare Advantage clients from the Affordable Care Act's financial impact but will effectively demonstrate nothing.

"I find the October 2012 implementation for the Medicare Advantage bonus payments very politically convenient and suspicious," Lankford said in a statement to the Tulsa World.

"According to a new (General Accounting Office) report released in March, the structure of the demonstration program will not provide any reliable data, and the administration will spend over $8 billion on a program that has no basis in law."

The demonstration program is designed to hide the dramatic cuts set to take effect in the Medicare Advantage program in the next three years as a result of the Affordable Care Act, according to Lankford.

"There is no other explanation for this program than the administration taking $8 billion of taxpayer money to prop up the true effects of the Affordable Care Act before the November election," he said.

One of the ways the Affordable Care Act is financed is through $500 billion in Medicare savings, much of that coming from changes in Medicare Advantage, a popular alternative Medicare program run by private insurance companies.

About 27 percent of Medicare clients chose to take their services through a private carrier.

Changes to Medicare Advantage would make it more expensive for seniors, an important voting block in the upcoming presidential election.

Issa suggested that the demonstration project was devised as a means of temporarily wiring around the issue without congressional approval.

James Cosgrove, health-care director of the nonpartisan U.S. Government Accountability Office, testified that the demonstration project is far larger than more than 80 previous demonstration projects - seven times larger than the next closest one - and will result in no usable information because it doesn't leave any unaffected control group for comparison.

By rewarding Medicare Advantage providers with bonuses for quality care, the financial impact of reduced federal funding for the program is temporarily wiped out, but Cosgrove said the bonuses are based on performance before the demonstration began and reward programs for only average performance.

He and Edda Emmanuelli-Perez, an attorney with the GAO, called on the Department of Health and Human Services to cancel the demonstration project.

Edda Emmanuelli-Perez stopped short of saying the program was illegal, but said it did not meet the elements of statute.

Jonathan Blum, acting deputy administrator for the U.S. Center of Medicare and Medicaid Services, said the demonstration project is a legitimate effort to make Medicare Advantage more efficient and effective, and the experiment is already providing anecdotal evidence of dramatic success.

"Today we see very positive signs that the overall strategy is working," Blum said. "Today we are paying much lower subsidies to the health plans."

Although the Advantage program had provided Medicare services at about 114 percent of the cost of the traditional Medicare plan, the program has brought those costs to 107 percent and on track to cost no more than the traditional plan, he said.

Democrats on the investigative committee defended the Affordable Care Act and the demonstration program.

"There's no scandal here," said Rep. Elijah Cummings, D-Md. "This is a legitimate and substantive disagreement about how best to structure bonuses to incentivize quality care and how to design a demonstration program to achieve its intended results in an effective and efficient manner."

He asked Cosgrove if he had any evidence of political motives in the shaping of the project.

The GAO official said his investigation didn't look for any motives.

Online: Tulsa World