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White House Downplays GAO Report on Questionable Bonuses

MANDEL NGAN/AFP/Getty Images(WASHINGTON) -- 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.

The bonuses are part of a scaled structure that is supposed to encourage “larger and faster annual quality improvement,” the report says. One of the problems, GAO says, is that because of its poor design, most of the bonuses go not to excelling plans but to satisfactory ones. The size of this demonstration project is considerable; the GAO recommended that Health and Human Services Secretary Kathleen Sebelius cancel this bonus payment system.

Asked about the report, 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. While briefly addressing “the temporary demonstration program” as one way “to improve the quality of care in Medicare Advantage,” Carney said 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.”

The GAO report said that the bonus plan in the Medicare Advantage demonstration program undermines deficit reduction goals. The “reliance on predemonstration performance data, the absence of an appropriate comparison group of MA plans, and design features that are inconsistent with its research goal make it unlikely that the demonstration will produce meaningful results,” the report says.

Sen. Orrin Hatch, R-Utah, who requested the GAO study, said that the “timing of this demonstration program raises serious questions about the Obama administration’s use of taxpayer dollars for political purposes. According to the GAO report, ‘The largest annual offset will occur in 2012 -- 71 percent -- followed by 32 percent in 2013 and 16 percent in 2014.’ Given that Medicare’s open enrollment season begins in October, this report 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.”

Asked about the failure of the health care law to shore up Medicare, Carney said “part of why it hasn’t worked yet is because Republicans in Congress refuse to accept the basic premise that we need to take a balanced approach to our deficit and debt reduction. They are out there telling the American people, through the Ryan Republican budget, that we need to dramatically cut taxes on the wealthiest Americans -- dramatically, and we will pay for that in large part by gutting discretionary spending programs, investments in education and innovation and basic research, in infrastructure, and by ending … Medicare as we know it.”

Copyright 2012 ABC News Radio

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