- The Washington Times - Wednesday, July 25, 2012

House Republicans berated the Obama administration Wednesday over a Medicare bonus program deemed wasteful by federal investigators, accusing top health officials of trying to pump extra money into the Medicare Advantage program ahead of the president’s bid for re-election.

The bonus program was included in the 2010 health care law to reward four- and five-star Medicare plans for offering superior benefits, but administration officials soon made it more generous by including three-star plans, which had the effect of spreading out the benefits to more seniors.

But the Government Accountability Office concluded in April that the Centers for Medicare and Medicaid Services tripled the program’s cost while failing to show that it would improve Medicare plans.

Top officials at the two agencies — one nonpartisan, the other headed by Mr. Obama’ political appointees — appeared before the House Oversight and Government Reform Committee on Wednesday morning to argue their case, summoned by Chairman Darrell E. Issa.

While Jonathan Blum, deputy administrator of the Centers for Medicare and Medicaid Services, insisted there’s proof that the bonuses are already working, Mr. Issa accused him of trying to hide flaws in the Affordable Care Act by putting off unpopular Medicare cuts.

And Mr. Issa said CMS is wasting $8.3 billion in taxpayer funds, the estimated 10-year cost of the revised program.

“What seniors need to understand is the $8.3 billion you’re taking is because Obamacare was screwed up,” the California Republican told Mr. Blum. “At least be honest and tell the truth here.”

Mr. Blum said the bonus program is helping the administration accomplish key goals of encouraging plans to cut costs and improve benefits. While only 7 percent of seniors are presently enrolled in a five-star Medicare plan, the eventual goal is to make sure every senior has access to a top-rated plan, he said.

“At the end of the day, I think our measure will be: Does every Medicare beneficiary have a chance to sign up for a four- or five-star plan?” Mr. Blum said. “So far, we’ve seen very positive signs.”

Mr. Issa pressed GAO officials on their findings that the expanded bonuses will mainly affect average-performing plans, effectively removing incentives for them to improve.

Under the original rules, plans covering about one-third of Medicare Advantage enrollees would have been eligible for bonuses, but under the administration’s revisions, about 90 percent of enrollees are in qualifying plans. GAO health care team director James Cosgrove acknowledged that could reduce incentives.

“It certainly does reward plans that enroll about 90 percent of beneficiaries, and in that sense it also lessens the incentive for plans to move up, that’s correct,” Mr. Cosgrove said.

And Republicans charged that the administration spent more money than authorized by Congress, even though federal law already gives Secretary of Health and Human Services Kathleen Sebelius authority to experiment with ways to make Medicare more effective.

“Based on your experience of past demonstration projects, is there any reason that this plan couldn’t be done on a much smaller scale and thus be as effective for less money?” Mr. Issa asked Mr. Cosgrove.

“No,” Mr. Cosgrove replied. “That’s what we think a well-designed demonstration would be to start small without spending over $8 billion.”

The plans in question are run by private insurers who participate in Medicare Advantage, a popular alternative that typically offers  more coverage than traditional fee-for-service Medicare and currently covers about one-fourth of all seniors.

Because the government has been paying more subsidies to Medicare Advantage plans than it pays for beneficiaries in traditional Medicare, the health care law phases out the extra payments over several years until they’re more in line with fee-for-service.

Republicans running for House and Senate seats in November have made the Medicare cuts a major political issue on the campaign trail, using it to try to sour voters against Mr. Obama’s health care overhaul and biggest legislative accomplishment.

And as congressional Republicans raised the issue on the Hill, Democrats pushed back. Rep. Elijah E. Cummings, Maryland Democrat and the committee’s ranking member, said the issue doesn’t amount to a “scandal.”

“This is a legitimate 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 manner,” he said.

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