Medicare Advantage Quality Bonus Payment Demonstration

 

By letter dated July 11, 2012, GAO’s General Counsel advised HHS Secretary Kathleen Sebelius that the Centers for Medicare & Medicaid Services (CMS) has not established that the agency’s Medicare Advantage (MA) Quality Bonus Payment Demonstration is within its legal authority under section 402 of the Social Security Amendments of 1967 as amended. In March 2012, GAO issued a report recommending that CMS terminate the $8 billion demonstration because of the demonstration’s high cost and significant design shortcomings. CMS is implementing the demonstration in lieu of the MA quality bonus payment program established under the Patient Protection and Affordable Care Act. GAO’s General Counsel concluded, based on the March report findings and correspondence with CMS, that the agency has not established that the demonstration complies with section 402, which provides the agency authority to initiate Medicare payment changes to determine whether, and if so, which, changes in methods of Medicare payment or reimbursement have the effect of increasing the efficiency and economy of Medicare services through the provision of additional incentives.

 

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