OIG, GAO Reports Focus on Healthcare.gov Operations

The OIG has issued two reports on implementation of the ACA health insurance “Marketplaces.” The first report, “Marketplaces Faced Early Challenges Resolving Inconsistencies with Applicant Data,” looked at the extent to which the federal and state health insurance marketplaces ensured the accuracy of information submitted by insurance applicants, including information related to eligibility for premium tax credits and cost sharing reductions. According to the OIG, marketplaces were unable to resolve most data inconsistencies, particularly involving citizenship and income information (although the OIG cautions that inconsistencies do not necessarily indicate that incorrect information was provided or that financial assistance is inappropriate). The report recommends additional planning and oversight to resolve inconsistencies.

A related OIG report questions the effectiveness of internal controls implemented by the federal, California, and Connecticut marketplaces in ensuring that individuals were enrolled in qualified health plans (QHPs) according to federal requirements. In particular, the OIG identified deficiencies in internal controls that could limit the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining applicant’s eligibility for enrollment in a QHP.  The OIG recommended steps to verify applicant data, determine enrollment and cost sharing assistance eligibility, and maintain and update enrollment data. 

Finally, the GAO released a report that concentrates on contractor performance related to the Healthcare.gov portal. The GAO points cost increases and delayed system functionality for the federally facilitated marketplace that resulted from CMS’s lack of effective planning, changing requirements and oversight gaps. GAO recommends that CMS take immediate steps to address contract costs, acquisition strategies, and use of oversight tools. In its response to the report, CMS discussed improvements it was making in the management of the Marketplace (including a stronger CMS management structure, an improved structure of Marketplace contracts, and a strengthened acquisition workforce). CMS expressed confidence that “its contractors will deliver the needed capabilities for the 2015 open enrollment period in a timely and cost-efficient manner.”

GAO Highlights Differences in Federal Program Drug Prices

The Government Accountability Office (GAO) has released data comparing retail prescription drug prices paid by the Department of Defense (DOD), Medicaid, and Medicare Part D for a sample of 78 high-utilization/high-expenditure drugs. In general, the GAO determined that Medicaid paid the lowest average net prices for both brand-name and generic drugs in the sample based on data for the third quarter of 2010. For the entire sample, Medicare Part D paid an estimated 32% higher average net price than Medicaid, while DOD paid 60% more than Medicaid (although Medicare Part D paid more for brand-name drugs than did DOD). Key factors affecting net prices paid by each program included the amount of any post-purchase price adjustments (e.g., refunds, rebates, or price concessions received by each program from drug manufacturers), which equaled approximately 15% of the gross price for Medicare Part D, 31% for DOD, and almost 53% for Medicaid across the entire sample.

GAO Assesses Trends in Medicare Physical Therapy Self-Referrals

The GAO recently examined “self-referral” for outpatient physical therapy (PT) services, which the GAO defines as a provider referring patients to entities in which the provider or the provider's family members have a financial interest. According to the GAO, non-self-referred PT services per 1,000 Medicare FFS beneficiaries increased by 41% from 2004 to 2010, while the number of self-referred PT was generally flat. Expenditures associated with non-self-referred PT services also grew at a higher rate than for self-referred services. The GAO observed that these findings differ from its prior reviews of self-referrals involving advanced imaging, anatomic pathology, and intensity-modulated radiation therapy, in which the GAO found that self-referred services and expenditures grew faster than non-self-referred services and expenditures. The GAO suggests that a potential reason for this difference is that non-self-referred PT services can be performed by providers who can directly influence the amount, duration, and frequency of PT services through the Medicare written plan of care, whereas radiologists, for example, generally do not have the discretion to order more imaging services or more intense imaging procedures.

In addition, the GAO found that the relationship between provider self-referral status and PT referral patterns was mixed, and varied on the basis of referring provider specialty, Medicare beneficiary practice size, and geography. Self-referring providers in the three specialties that GAO examined (family practice, internal medicine, and orthopedic surgery) generally referred more beneficiaries for PT services on average than non-self-referring providers, but ordered fewer PT services per beneficiary compared to non-self-referring providers. The GAO also found that PT service referrals in the year a provider began to self-refer increased at a higher rate relative to non-self-referring providers of the same specialty.

In the report, “Medicare Physical Therapy: Self-Referring Providers Generally Referred More Beneficiaries but Fewer Services per Beneficiary,” the GAO concluded that regardless of referral patterns, the substantial growth in PT services raises concerns about costs for Medicare and beneficiaries. The GAO suggests that CMS’s initiative to collect additional information on beneficiary functional status on all PT claims may help CMS better assess the appropriateness of PT treatment provided by both self-referring and non-self-referring providers.

GAO Reviews Financial Characteristics of Applicants for Medicaid Nursing Home Coverage

The GAO has issued a report entitled “Medicaid: Financial Characteristics of Approved Applicants and Methods Used to Reduce Assets to Qualify for Nursing Home Coverage.”  The report highlights ways applicants in Florida, New York, and South Carolina reduce their countable assets to qualify for Medicaid nursing home coverage, including (1) spending countable resources on goods and services that are not countable towards financial eligibility, such as prepaid funeral arrangements; (2) converting countable resources into noncountable resources that generate an income stream for the applicant (e.g., an annuity or promissory note); (3) giving away countable assets as a gift to another individual (which could lead to a penalty period that delays Medicaid nursing home coverage); and (4) for married applicants, increasing the amount of assets a spouse remaining in the community can retain (e.g., through the purchase of an annuity). The report does not include recommendations.

GAO Calls for Greater Medicaid Managed Care Program Integrity Efforts

A recent GAO report, “Medicaid Program Integrity: Increased Oversight Needed to Ensure Integrity of Growing Managed Care Expenditures," identified gaps in both state and federal Medicaid managed care program integrity efforts. For instance, based on a review of Medicaid activities in seven states, the GAO found that five state program integrity units and four Medicaid Fraud Control Units focused on Medicaid FFS claims and do not closely examine Medicaid managed care activities. Likewise, the GAO concluded that federal entities have taken few steps to address Medicaid managed care program integrity. As a result, federal and state entities may not be able to ensure that managed care organizations are taking appropriate actions to identify, prevent, or discourage improper payments. Given the expanding role of Medicaid managed care, inadequate managed care program integrity efforts “will leave a growing portion of federal Medicaid dollars vulnerable to improper payments.” The GAO therefore recommended that CMS: require states to audit payments to and by managed care organizations; update its guidance on Medicaid managed care program integrity; and provide states additional support for managed care oversight, such as audit assistance from existing contractors.

GAO Offers Recommendations for Improvements to CMS Physician Feedback Efforts

A recent GAO report looked at how private health care entities provide performance data to physicians, and how such practices could be used to improve CMS efforts to provide feedback to providers. The GAO determined that the nine health insurers and statewide collaboratives it reviewed typically employ multiple benchmarks (e.g., peer group averages or past performance), while CMS only compares results to the national average rates of all physician groups that submitted data on any given measure. The GAO observes that CMS’s approach precludes physicians from viewing their performance in fuller context. The private entities also sent reports more than once a year, in contrast to CMS annual reports that may limit physicians' opportunity to make improvements in advance of their annual payment adjustments. The GAO suggests that as CMS implements and refines its physician feedback and Value Modifier programs, it should consider comparing physicians' performance against additional benchmarks, such as state or regional averages, and disseminating performance reports more frequently. The report is entitled  “Medicare: Certain Physician Feedback Reporting Practices of Private Entities Could Improve CMS's Efforts.” 

GAO Examines Impact of Advanced Diagnostic Imaging Accreditation on Medicare Beneficiary Access

The Government Accountability Office (GAO) has issued its second statutorily-mandated report regarding implementation of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) accreditation requirement for Medicare suppliers that furnish the technical component of advanced diagnostic imaging (ADI) services. The first report assessed CMS's standards for ADI accreditation and the agency’s oversight of the accreditation requirement. In the second report, "Medicare Imaging Accreditation: Effect on Access to Advanced Diagnostic Imaging Is Unclear amid Other Policy Changes," the GAO concentrates on the Medicare beneficiary impact of the accreditation requirement, focusing on beneficiary use of magnetic resonance imaging, computed tomography, and nuclear medicine (including positron emission tomography services). The GAO found that the number of such ADI services provided to Medicare beneficiaries in the office setting declined at similar rates both before and after the accreditation requirement went into effect on January 1, 2012, which suggests that the overall decline was driven at least in part by factors other than accreditation. The GAO also observed that the effect of accreditation on access is unclear given the other recent policy changes implemented by CMS and private payers (e.g., payment reductions and prior authorization requirements) that also could have contributed to the decline in the number of these services. CMS officials, accrediting organization representatives, and accredited ADI suppliers that the GAO interviewed suggested that any effect of accreditation on access was likely limited.

OIG, GAO Reports Examine Round 1 Rebid of the Medicare DMEPOS Competitive Bidding Program

On April 8, 2014, the OIG and GAO each issued reports focusing on different aspects of the “Round 1 Rebid” of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program. By way of background, under DMEPOS competitive bidding, only suppliers that are winning bidders, meet licensing and other standards, and enter into a contract with CMS may furnish selected categories of DMEPOS to Medicare beneficiaries in competitive bidding areas (CBAs), with very limited exceptions. Contract suppliers are paid based on the median of the winning suppliers’ bids in the CBA, rather than the DMEPOS fee schedule amount. The Round 1 Rebid was in effect for a 3-year period, from 2011 through 2013, involving nine DME product categories in nine CBAs. CMS subsequently “recompeted” contracts in the Round 1 areas (including additional products), with three-year contracts effective January 1, 2014. CMS also established a second round of bidding covering 100 CBAs, along with a national mail-order diabetic testing supplies competitive bidding program; those three-year contracts went into effect July 1, 2013.

The OIG report assesses CMS compliance with DMEPOS bidding rules in the Round 1 Rebid. The OIG concluded that CMS generally followed its competitive bidding program rules when it selected suppliers and computed single payment amounts for the Round 1 Rebid – although a number of CMS errors were identified. Specifically, the OIG conducted a review based on a random sample of 100 of the 3,011 established DMEPOS single payment amounts in the Round 1 Rebid Program and the selection process for 266 winning suppliers associated with the sampled payment amounts. The OIG determined that CMS followed all applicable requirements for 255 of the 266 winning suppliers, but nine winning suppliers did not meet financial documentation requirements, and CMS incorrectly used two suppliers in one single payment computation. While the OIG characterizes the overall effect on Medicare payments to suppliers as “immaterial,” the OIG estimates that CMS paid suppliers $34,000 less than they would have received without any errors (less than 0.1 percent of the $113 million paid under the Round 1 Rebid Program during the first 6 months of 2011). The OIG recommends that CMS: (1) follow its established program procedures and applicable federal requirements consistently in evaluating the financial documents of all suppliers, and (2) ensure that all bids of winning suppliers are included in the calculation of single payment amounts before offering contracts. CMS concurred with the recommendations, and pointed out that it has enhanced the financial review process to ensure that all reviewers are accountants or certified public accountants.  Looking ahead, the OIG will be conducting a similar analysis for Round 2 of competitive bidding; this analysis may include an analysis of CMS’s procedures for ensuring supplier compliance with applicable state licensure requirements (depending on the results of an ongoing limited scope review).

The GAO issued a broader review focusing on data from the second year of the Round 1 Rebid contracts, covering the Round 1 Rebid’s effects on Medicare beneficiaries, contract suppliers, and non-contract suppliers. Among other things, the GAO observed that:

  • The number of beneficiaries furnished DME items included in the competitive bidding program generally decreased more in CBAs than in demographically similar “comparator” areas. CMS suggests that such declines may be attributable to reduced inappropriate usage of DME and do not necessarily reflect beneficiary access issues. In fact, CMS stated in comments on the report that its “sophisticated real-time claims monitoring system has continuously found that beneficiary access to all necessary and appropriate competitive bid items has been preserved since the program began” – a conclusion generally disputed by industry.
  • A small number of contract suppliers generally had a large proportion of the market share in the nine competitive bidding areas.
  • The total number of DME suppliers and Medicare allowed charges decreased more in CBAs than in the comparator areas. For instance, the number of suppliers with Medicare allowed charge amounts of $2,500 or more per quarter decreased an average of 27% in the CBAs compared to 5% in the comparator areas.
  • The number of grandfathered suppliers had so diminished that CMS was no longer monitoring them after the second quarter of 2012.
  • The program did not appear to have adversely affected beneficiary access to covered items, although additional monitoring would be needed to monitor the impact of the national mail-order diabetic testing supplies program and Round 2.

GAO Urges CMS to Finalize ACA Medicaid Drug Pricing Reforms

The GAO recently issued a report on CMS efforts to implement Medicaid drug pricing reforms mandated by the Affordable Care Act (ACA). Specifically, the report discusses CMS development of the National Average Drug Acquisition Cost (NADAC) benchmark of retail pharmacy acquisition costs, and how NADAC amounts compare to ACA-based federal upper limits (FULs). Based on first quarter 2013 data, GAO found that draft FUL amounts calculated under the ACA formula were about 1.4% lower than the total NADAC amount in aggregate for 1,035 outpatient drugs. On the other hand, ACA-based FULs for individual drugs ranged from 96% lower than to 404% higher than the NADACs for the same drugs. The GAO also found large differences between the total ACA-based FUL amount and the total NADAC amount for generic and for branded generic versions. According to the GAO, total ACA-based FUL amount for the generic versions was 19% higher than the total NADAC amount, but for the branded generic versions the ACA FUL amount was 26% lower than the NADAC.

The GAO concluded that CMS is close to having a formula under which FULs would better reflect pharmacy acquisition costs, but it observes that CMS continues to apply FULs that were calculated more than four years ago. The GAO also observed that the relationship between ACA-based FULs and NADACs may be affected by factors such as rebates and discounts that are not reflected on pharmacy invoices, which will necessitate continued CMS monitoring. The GAO therefore recommended that CMS (1) expeditiously implement the ACA-based FUL formula and (2) monitor the relationship between the ACA-based FULs and the NADACs on an ongoing basis. HHS concurred with these recommendations; noting that it intends to finalize the ACA Medicaid FULs for multiple source drugs in July 2014 (CMS indicated to GAO that the agency was still considering how the ACA-based FULs would apply to branded generic versions in the final rule).

House Panel, GAO Examine Drug Shortages

On February 10, the House Energy and Commerce Subcommittee on Health held a hearing entitled “Examining Drug Shortages and Recent Efforts to Address Them.” In connection with the hearing, the Government Accountability Office (GAO) released a report that concluded that the number of shortages remains high, even though the FDA has taken steps to prevent and mitigate shortages (e.g., expediting application reviews and inspections, exercising enforcement discretion in appropriate cases, and helping manufacturers respond to quality problems). Some of the causes of shortages are beyond the agency’s authority, however, since the FDA “does not have control over private companies’ business decisions,” and cannot, for example, require manufacturers to start producing or continue producing drugs, or to build redundant manufacturing capacity. Nevertheless, the GAO called on the FDA to strengthen its internal controls over its drug shortage data, conduct periodic analyses to routinely and systematically assess drug shortage information, and use this information to proactively identify drug shortage risk factors.

GAO Report Confirms Insurance Coverage Prior to Medicare Linked to Better Health, Lower Program Spending

This post was written by Nancy Sheliga.

The Government Accountability Office (GAO) has released a report examining the effect of prior health insurance coverage on Medicare beneficiaries. The report specifically focuses on the health status, program spending, and use of services by Medicare beneficiaries with and without continuous health insurance coverage before Medicare enrollment. According to the GAO, Medicare beneficiaries with prior insurance initially used fewer or less costly medical services than those without prior insurance. Because the difference in total spending was the greatest during the first year in Medicare, the GAO hypothesizes that beneficiaries without prior continuous insurance may have had a pent-up demand for medical services in anticipation of coverage at age 65. In addition, the report finds that beneficiaries without prior continuous insurance have higher total and institutional outpatient spending but not higher spending for physician and other noninstitutional services, suggesting that they require more costly and intensive medical services or that they are continuing prior patterns of visiting hospitals more than physician offices. Finally, in line with previous research, the GAO found that beneficiaries with continuous health insurance coverage for approximately six years before enrolling in Medicare were more likely than those without prior continuous insurance to report being in good health during their first six years in Medicare.

GAO Examines Effectiveness of ZPIC Program Integrity Efforts

A recent GAO report assesses the effectiveness of Medicare Zone Program Integrity Contractors (ZPICs) -- contractors that perform program integrity activities designed to fight Medicare fraud, waste, and abuse. While the GAO notes that ZPICs take credit for over $250 million in Medicare savings in 2012 from actions such as stopping payment on suspect claims, the GAO observes that CMS would benefit from more data on whether quicker ZPIC action would lead to greater savings. The GAO therefore recommends that CMS (1) collect and evaluate information on the timeliness of ZPICs' investigative and administrative actions, and (2) develop ZPIC performance measures explicitly linking ZPICs' work to Medicare program integrity performance measures and goals.

GAO Ties Medicare Supplemental Coverage to Higher Health Spending

This post was written by Nancy Sheliga.

At the request of Senate Republican policymakers seeking a better understanding regarding the impact of supplemental coverage on overall Medicare spending, the Government Accountability Office (GAO) recently compared the health care expenditures of beneficiaries with only traditional fee-for-service (FFS) Medicare coverage to those of beneficiaries who have supplemental coverage from either private insurance companies (a.k.a., Medigap) or employer-sponsored plans. Based on a review of 2010 data, the GAO concluded that health care expenditures are higher for beneficiaries with supplemental coverage than for beneficiaries with FFS Medicare only. More specifically, both average Medicare spending and out-of-pocket expenses for beneficiaries with Medigap were significantly greater than for those with Medicare FFS coverage only. Within the FFS only group, those who are enrolled in Medicare's Part D prescription drug program spent considerably more on health care than those who are not enrolled in Part D.

While other research has found similar patterns, and Congressional policymakers have expressed concern that those with supplemental coverage may be less cost-conscious in their use of medical services, the GAO report also found that those with poorer health status and greater age have higher average health care expenditures in general. In addition, the GAO report references other past studies that have indicated that (1) characteristics such as health status and age may influence the decision to purchase supplemental coverage, possibly providing a partial explanation of the differences in expenditures, and (2) reducing supplemental coverage may cause some individuals to consider forgoing necessary services, possibly exacerbating their health care needs and perhaps increasing their long-term health care costs.

GAO Reports Jump in Medicare EHR Payments

Medicare electronic health records (EHR) incentive payments to hospitals and health care professionals topped $6.3 billion for 2012 – more than twice the $2.3 billion awarded for 2011 -- according to a GAO report entitled Electronic Health Records: Number and Characteristics of Providers Awarded Medicare Incentive Payments for 2011-2012. The proportion of eligible hospitals and professionals receiving payments also grew from 2011 to 2011, with 48% of eligible hospitals (2,291) receiving payments in 2012 compared to 777 hospitals (16%) in 2011.  For 2012, 31% of eligible professionals (183,712) were awarded payments, up from 10% (58,331) in 2011. Among hospitals and professionals awarded an incentive payment for 2012, the largest proportions were in the South, the smallest proportions were in the West, and a majority were in urban areas. More than four-fifths of the hospitals were acute care hospitals and three-fifths were nonprofit hospitals, while more than half of professionals were specialty practice physicians.

GAO Examines Self-Referral of Anatomic Pathology, IMRT Services

The Government Accountability Office (GAO) has issued two reports on trends in physician referrals to entities in which the provider or the provider's family members have a financial interest – both of which conclude that financial incentives are likely a major factor driving increases in referrals. In the first report, “Medicare: Action Needed to Address Higher Use of Anatomic Pathology Services by Providers Who Self-Refer,” the GAO concentrates on three provider specialties -- dermatology, gastroenterology, and urology -- that in 2010 accounted for 90% of referrals for self-referred anatomic pathology services (the preparation and examination of tissue samples to diagnose disease). Among other things, the report found that referrals for anatomic pathology services by these specialists (specifically services represented by CPT code 88305) substantially increased the year after they began to self-refer, compared both to before they started self-referring and to those specialists who continued to self-refer or never self-referred services. Self-referring providers of these specialties also referred more services on average than non-self-referring providers, even taking into account geography and patient characteristics. In response to the GAO’s suggestion that CMS improve its ability to identify self-referred anatomic pathology services and limit financial incentives for high levels of referrals, HHS notes that it identified CPT code 88305 as a potentially misvalued code and reduced its reimbursement by approximately 30% percent in 2013, which HHS believes has significantly reduced the financial incentives associated with self-referral for these procedures.

In a second report, “Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny,” the GAO examined self-referral of prostate cancer-related intensity-modulated radiation therapy (IMRT) services. According to the GAO, from 2006 to 2010, the number of IMRT procedures performed by self-referring groups increased rapidly (from about 80,000 to 366,000), while it declined for non-self-referring groups. This growth in self-referred services was primarily due to limited-specialty groups, particularly urologists, rather than multispecialty groups. Self-referring groups also were more likely to refer their patients for IMRT than other less costly treatments (e.g., radical prostatectomy or brachytherapy). Because Medicare providers are generally not required to disclose that they self-refer IMRT services, the GAO states that “beneficiaries may not be aware that their provider has a financial interest in recommending IMRT over alternative treatments that may be equally effective, have different risks and side effects, and are less expensive for Medicare and beneficiaries.” The GAO recommended that CMS require providers to disclose their financial interests in IMRT to their patients; which HHS does not support because, among other things, it could be complex to administer and would not address overutilization. HHS also noted that the President has proposed excluding certain services from the in-office ancillary services exception to the physician self-referral law.

GAO Reviews Status of ACA Insurance Exchange Development

The GAO has issued two reports on the status of federal and state efforts to establish health insurance exchanges under the ACA. The first report discusses CMS efforts to establish federally-facilitated exchanges in 34 states that will not operate a state-based exchange for 2014.  A companion report examines federal and state efforts to implement insurance exchanges for small businesses, known as Small Business Health Options Programs, or SHOPs.  In short, the GAO concluded that while much progress has been made, much remains to be accomplished in a relatively-short timeframe in the areas of eligibility and enrollment, plan management (including certification of Qualified Health plans), and consumer assistance. The GAO could not determine whether CMS contingency planning “will assure the timely and smooth implementation of the exchanges by October 2013.”
 

GAO Highlights Gaps in Medicare Imaging Accreditation Framework

The Government Accountability Office (GAO) has identified shortcomings in CMS’s implementation of accreditation requirements for suppliers of advanced diagnostic imaging (ADI) services under the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). For instance, the GAO found significant differences among the accrediting organizations arising from the lack of minimum national standards, rendering it difficult for CMS to monitor and assess such factors as qualifications of technologists and medical directors and the quality of clinical images. The GAO also reports that CMS’s oversight of the accreditation requirement is limited, with the initial focus on ensuring that claims were paid only to accredited suppliers. According to the GAO, CMS has not developed an oversight framework that would enable it to monitor and measure performance. The three accrediting organizations for ADI facilities approved by CMS are the American College of Radiology, the Intersociety Accreditation Commission and The Joint Commission (TJC). One area of controversy in the report involves the GAO’s criticism of TJC’s accreditation program for having less focus on imaging quality and physician qualifications than the other two accrediting organizations, assertions the TJC strongly contested. The GAO recommends that CMS: publish minimum national standards for the accreditation of ADI suppliers; develop an oversight framework for evaluating accrediting organization performance; develop more specific requirements for accrediting organization audits; and clarify guidance on immediate-jeopardy deficiencies. HHS concurred with the recommendations.

GAO Assesses State Efforts to Establish ACA Insurance Exchanges

The Government Accountability Office (GAO) has provided a status report on seven states’ efforts to establish health insurance exchanges -- online marketplaces mandated by the ACA to enable eligible individuals and small business employers to compare and select health insurance coverage offered by qualified health plans. States can establish and operate an exchange themselves or partner with HHS, otherwise HHS will operate a federally-facilitated exchange for the state. As of March 14, 2013, 18 states had announced they would be establishing a state-based exchange, 7 states intend to partner with HHS, and HHS will establish a federally-facilitated exchange in 26 states. The GAO report provides details on the implementation efforts of the District of Columbia, Iowa, Minnesota, Nevada, New York, Oregon, and Rhode Island. Six of the states will operate a state-based exchange, while the seventh -- Iowa -- will partner with HHS. The seven selected states expect they will be ready for enrollment by the October 1, 2013 deadline, with health insurance coverage effective January 1, 2014. The report addresses the states’ efforts to: decide which QHPs will be included in the exchange; develop an information technology infrastructure; implement a consumer outreach and assistance program; and sustain their exchange financially.

GAO Compares DOD and VA Drug Purchase Prices

A recent GAO report compares direct purchase prices paid by the Department of Defense (DOD) and the Department of Veterans Affairs (VA) for a sample of 43 brand-name and 40 generic drugs for the first quarter of 2012. In short, the GAO found that each agency obtained better prices on the type of drugs its beneficiaries use more, with generic drugs accounting for 83% of VA's utilization of the sample drugs, and brand-name drugs accounting for 54% of DOD's utilization. For instance, DOD's average unit price for the 40 generic drugs was 66.6% higher than the VA's average price, while the VA's average unit price for the 43 brand-name drugs was 136.9% higher than DOD's average price. The GAO points out that different pricing can result from factors such as variations in agency formulary design and prescription practices, differences in price and rebate negotiations with manufacturers, and differences in beneficiary populations.

GAO Report Targets MA Risk Score Adjustment Formula

The GAO has issued a report on the methodology CMS uses to calculate a risk adjustment for Medicare Advantage (MA) plans, updating an analysis in provided in January 2012. The GAO previously reported that differences in diagnostic coding between MA plans and Medicare FFS resulted in inaccurately-high MA risk scores and excessive payments to MA plans. While CMS made an adjustment for coding differences in 2010, the GAO concluded that the adjustments were insufficient. Based on an analysis of two years of data available since the GAO completed its analysis for the January 2012 report, the GAO found that the cumulative impact of coding differences on risk scores increased from 2010 through 2012, and that CMS's adjustment to risk scores to account for diagnostic coding differences was too low. The GAO estimates that as a result, at least $3.2 billion in excess payments were made to MA plans over three years. The GAO continues to recommend that CMS update its methodology to more accurately account for differences in diagnostic coding between MA plans and Medicare FFS. 
 

Older Entries

March 13, 2013 — GAO Faults Low-Volume Adjustment Formula for Dialysis Facilities

March 12, 2013 — GAO Releases Data on Pharmacy Services Administrative Organizations

January 30, 2013 — GAO Offers Recommendations for Medicare Physician Value Modifier Program

January 14, 2013 — GAO Calls for Greater Transparency/Accountability for Medicaid Supplemental Payments

January 14, 2013 — GAO Examines Consumer Protections for Medicare/Medicaid Dual Eligibles

December 19, 2012 — GAO Calls for Improvements in Use of Medicare Prepayment Edits

December 19, 2012 — GAO Reviews Effectiveness of Medicaid Program Integrity Efforts

December 19, 2012 — GAO Examines Characteristics of Providers Receiving Medicaid EHR Incentive Payments

December 19, 2012 — GAO Examines Medicare Dialysis Reimbursement

December 17, 2012 — OIG Releases 2012 Compendium of Unimplemented Recommendations

November 29, 2012 — GAO Assesses CMS Fraud Prevention System Implementation

November 16, 2012 — GAO Releases Data on High-Expenditure Medicare Part B Drugs

November 13, 2012 — GAO Report Examines Medicare Costs From Self-Referrals of Advanced Imaging Services

October 30, 2012 — GAO Finds Part D Coverage Gap Discount Program Did Not Spur Increased Drug Prices

October 16, 2012 — GAO Spotlights Top Provider Types for Criminal/Civil Health Fraud

October 16, 2012 — GAO Flags Concerns about Implantable Medical Device Information Security

October 15, 2012 — GAO Highlights Increasing Medicare Ambulance Provider Costs

September 27, 2012 — GAO Reviews Medicare Special Needs Plans for Dual-Eligible Beneficiaries

September 27, 2012 — GAO Information on States' Use of Medicaid Managed Care

September 5, 2012 — GAO Report Focuses on Medicaid Supplemental Payments

September 5, 2012 — GAO Examines State Medicaid LTC Eligibility Information

August 17, 2012 — GAO Reviews States' Implementation of ACA Medicaid Provisions

August 17, 2012 — GAO Examines Unsafe Injection Practices in Ambulatory Care Settings

June 27, 2012 — GAO Examines HHS Action on Privacy and Security of Prescription Drug Data

June 27, 2012 — OIG, GAO Review Medicaid HCBS Programs

June 18, 2012 — Medicare Trends in Implantable Medical Device (IMD) Procedures

May 14, 2012 — GAO Reviews Medicare Provider/Supplier Screening Efforts

May 14, 2012 — GAO Offers Recommendations for EHR Program Safeguards

May 14, 2012 — GAO Report on Impact of Fraud and Abuse Laws on Medicare Financial Incentive Programs

May 14, 2012 — GAO Calls on CMS to Cancel MA Quality Bonus Payment Demonstration

May 14, 2012 — GAO Reviews Oversight of Group Purchasing Organizations (GPOs)

April 23, 2012 — GAO Summarizes Stakeholder Views on Health Care Provider Antitrust Policy

April 23, 2012 — GAO Examines FDA Device Review Process

April 2, 2012 — GAO Examines CMS Nursing Home Quality Rating System

March 14, 2012 — GAO Examines Nursing Home Quality Survey Implementation

March 14, 2012 — GAO Reviews Research on Generic Drug Savings

February 13, 2012 — GAO Focuses on Medicare Advantage (MA) Risk Scores

February 13, 2012 — GAO Examines Price Transparency for Implantable Medical Devices

January 25, 2012 — GAO Examines Prescription Pain Reliever Abuse

January 5, 2012 — GAO Report on Pediatric Medical Devices

December 13, 2011 — GAO Examines Trends in Medicare Advantage Program

November 14, 2011 — GAO Presents Framework for Medicaid Funding Formula Revisions

October 28, 2011 — GAO Highlights Lack of Meaningful Health Care Pricing Information for Consumers

October 28, 2011 — GAO Report Examines CMS Oversight of Long-Term Care Hospitals

October 14, 2011 — GAO Examines Part D "Doctor Shopping"

September 29, 2011 — GAO Examines Manufacturer Discounts Under 340B Drug Program

September 29, 2011 — GAO Assesses DEA Prescription Drug Control Efforts

September 1, 2011 — GAO Report Examines Effectiveness of Medicare Integrity Program.

August 16, 2011 — GAO Assesses Challenges with CMS Physician Feedback Program

August 16, 2011 — GAO Examines Information for Policymakers on Health Care Quality/Value

August 16, 2011 — Part D Plan Mid-Year Formulary Changes Reviewed by GAO

August 16, 2011 — New GAO Report on Private Investment (PI) Nursing Homes

August 1, 2011 — GAO Report on Part D Drug Utilization for Low-Income Subsidy Beneficiaries

July 29, 2011 — GAO Listing of Federal ACA Implementation Contract Awards

July 18, 2011 — GAO Examines Potential "Manufacturer-Level" DMEPOS Competitive Bidding.

June 28, 2011 — GAO Issues Report on FDA Oversight of Medical Device Recalls.

June 27, 2011 — GAO Details Recovery Act Comparative Effectiveness Research Grants

June 14, 2011 — GAO Report on FDA Tracking of Pediatric Research

May 13, 2011 — GAO, OIG Reports on Nursing Home Oversight and Care

April 13, 2011 — GAO Examines Ways to Aid State Medicaid Programs During Recessions

March 29, 2011 — GAO and OIG Examine Medicare Part D Issues

March 29, 2011 — Medicare Payment for Oral ESRD Drugs Examined by GAO

March 29, 2011 — GAO Reports on Pricing Trends for Commonly-Used Drugs

March 29, 2011 — New GAO Reports on Private Health Insurance Coverage, Denials

March 7, 2011 — GAO Reports on Duplications in HHS and Other Federal Programs

March 7, 2011 — Inconsistencies in Electronic Prescribing Incentive Programs

February 18, 2011 — GAO Report on Medicare Home Oxygen Payments

February 18, 2011 — GAO Report on Medicare Advantage Bids

December 28, 2010 — GAO Report on Government Fiscal Challenges

December 28, 2010 — ACA Impact on Medicaid Outpatient Drug Pricing

December 28, 2010 — GAO Recommends Enhanced QIO Quality of Care Review Data

November 29, 2010 — GAO Report on Integrated Delivery Systems

October 29, 2010 — GAO Report on Nursing Home Ownership

October 28, 2010 — GAO Issues Two Reports Examining FDA Foreign Inspection Issues

October 15, 2010 — State Use of Enhanced Medicaid Funding Under Recovery Act

October 15, 2010 — Quality Improvement Organizations (QIO) Responses to Beneficiary Complaints

October 15, 2010 — CMS Use of Error Rate Data To Focus on Error-Prone Providers

October 15, 2010 — Changes in Air Ambulance Industry

September 30, 2010 — GAO Report on GPO Services and Ethics Initiatives

September 17, 2010 — GAO Report on Department of Veterans Affairs (VA) Drug Formulary Process

August 31, 2010 — GAO Report on New Drug Approvals Based on Non-Inferiority Trials

August 13, 2010 — Actuarial Soundness of Medicaid Managed Care Rates

June 17, 2010 — GAO Report on Home Infusion Therapy

June 8, 2010 — GAO Report on Medicare Advantage Plan Design

June 8, 2010 — GAO Report on Nursing Home Deficiencies

May 13, 2010 — GAO Report on Bundled Payment System for ESRD Services

April 30, 2010 — GAO Report on Special Focus Facilities

April 30, 2010 — GAO Report on Medicare Contracting Reform

April 16, 2010 — GAO Report on RAC Program

March 31, 2010 — GAO Report on FDA Management Challenges

March 15, 2010 — GAO Report Calls for Increase in FDA Criminal Prosecutions of Company Executives

March 15, 2010 — Medicare Part D/High-Cost Drugs

February 26, 2010 — GAO Report on Electronic Personal Health Information Exchange

February 11, 2010 — GAO Report on Patient Safety Act Implementation

January 27, 2010 — GAO Issues Report on Medicare Advantage Marketing Violations

January 13, 2010 — GAO Report on Medicaid Drug Pricing

January 13, 2010 — Brand-Name Prescription Drug Pricing

January 13, 2010 — GAO Examines Nursing Home Quality Issues

January 13, 2010 — Uncompensated Hospital Care Costs

December 21, 2009 — GAO Report on Drug Safety Oversight