GAO questions legality of Medicare Advantage bonuses

In a 10-page letter sent Wednesday to HHS Secretary Kathleen Sebelius, the Government Accountability Office's general counsel raised questions about the $8.3 billion demonstration program, which Republicans had criticized as a ruse to mask some of the health law's cuts in seniors' benefits. 

The Associated Press: Gov't Auditors Doubt Legality Of Medicare Bonuses
Government auditors Wednesday questioned the legality of a costly Medicare bonus program, escalating a running skirmish in the broader battle over President Barack Obama's health care law and its consequences for seniors. In a letter to the administration, Government Accountability Office General Counsel Lynn Gibson wrote that the nonpartisan agency remains concerned about Medicare's legal authority to undertake the $8.3 billion Medicare Advantage quality bonus program. Launched well after the overhaul passed, the bonus program effectively restored some of the cuts that the legislation made to popular private insurance plans within the giant health care program for seniors and disabled people (Alonso-Zaldivar, 7/11).

CQ HealthBeat: Congressional Watchdog Continues To Criticize Medicare Advantage Demonstration
The General Accountability Office is continuing to hammer away at the Obama administration's $8.35 billion Medicare Advantage demonstration program, this time in a 10-page letter Wednesday to Health and Human Services Secretary Kathleen Sebelius that questions her authority to create the pilot effort. Under the health care overhaul, the best-performing private Medicare health plans, called Medicare Advantage plans, were to receive bonuses. The idea was that these plans would have an incentive to get the highest performance rating: five stars. But administration officials decided that instead of relying on the health care law language, they would use their authority under Social Security to create a demonstration program that would give bonuses starting with average-performing plans that were rated at three stars (Bunis, 7/11).

Modern Healthcare: GAO Questions HHS Stance On Advantage Plan Bonus Program
Nonpartisan congressional auditors were not convinced by HHS' explanations that the department had any legal authority to launch its $8 billion pilot program of bonus payments to Medicare Advantage plans. Lynn Gibson, general counsel for the Government Accountability Office, wrote HHS Secretary Kathleen Sebelius on Wednesday that her department's responses to a January GAO report questioning the legal authority for the program failed to describe any legal basis. ... Republicans have long argued that the pilot program was simply a slush fund aimed at masking the health law's financial undercutting of the increasingly popular private Medicare Advantage plans until after President Barack Obama faced re-election (Daly, 7/11).

In other news related to the Medicare program -

CQ HealthBeat: Docs Tell Baucus Medicare Payments Should Move Toward Team-Based Care
Physician groups urged senators Wednesday to stabilize Medicare payments and launch a period of experimentation with new forms of reimbursement and health care delivery that involve close collaboration with patients and other providers. Senate Finance Chairman Max Baucus, under the gun to find payment offsets for legislation blocking a scheduled Jan. 1 payment cut of 27 percent, appeared to be thinking along similar lines after hearing from the groups at a morning round table the committee sponsored (Reichard,7/11).