Medicare Advantage quality bonus program “has the earmarks of an earmark . . .”

That’s according to Bob Berenson, Vice Chairman of the Medicare Payment Advisory Commission (MedPAC), quoted by John Reichard, Editor at CQ Healthbeat (subscription required).  Berenson was attending a MedPAC meeting on Friday during which the quality bonus demonstration was discussed.

MedPAC Vice Chairman Robert Berenson quipped that the demo “has the earmarks of an earmark,” adding that he thought demonstration programs had to be budget-neutral to pass muster with the White House Office of Management and Budget. Commission Chairman Glenn Hackbarth said the hypothesis of the demo seems to be that by extending bonuses, CMS would boost the quality of health plans. “My next question is how would they know? What is the control group here?” [MedPAC staffer Carlos] Zarabozo said that “usually they had a contractor figure that out.” The analyst surmised that CMS might use “historical information” to gauge improvements in quality. That would be “really lame,” Hackbarth replied, adding that the program doesn’t really look like a true demonstration program. “This is fairly transparently a way to give more money to plans and that’s distressing.”

I agree with Berenson’s and Hackbarth’s assessments and calculated the 10-year cost to the Medicare Trust Fund at $16 billion, a substantial fraction of the $136 billion in Medicare savings attributed to the Affordable Care Act.  This is an alarming amount of money to be giving to Medicare Advantage plans without a clear idea of what we’re buying for it.

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