CMS published a final rule on May 23, 2013 that implements new medical loss ratio (MLR) requirements for the Medicare Advantage (MA) program and the Part D prescription drug program. Under the new requirements, which were mandated by the ACA, MA organizations and Part D plan sponsors are required to report their MLR (percentage of revenue used for patient care), and are subject to financial and other penalties for a failure to meet a new statutory requirement that they have an MLR of at least 85%. The rule is generally effective for contract years beginning on or after January 1, 2014.
The OIG has issued an ACA-mandated report on Medicare Part D prescription drug plan and MA drug plan coverage of drugs commonly used by full-benefit dual-eligible individuals (that is, individuals eligible for Medicare and Medicaid and who receive full Medicaid benefits and Medicare premium and cost-sharing assistance). The OIG determined that for 2013, Part D/MA plan formularies include 96% of 195 commonly-used drugs, with 64% of the commonly-used drugs included in all such formularies. Plans applied utilization management tools to 28% of the unique drugs reviewed in 2013, compared to 24% in 2012 (mainly attributable to an increase in the use of quantity limits).
CMS has issued guidance to state survey agencies explaining adjustments CMS is making to survey and certification operations to "accommodate sequestration with as little impact on the public as possible." The guidance discusses revisions in the frequency and timelines for various surveys and other survey changes in light of a 5% reduction to the FY 2013 survey and certification Medicare budget. CMS also issued a May 1, 2013 memo to Part C and D plans on sequestration, covering rules regarding reducing payments to contracted and non-contract providers, beneficiary liability under sequestration, coverage gap discount program payments, Part D risk corridor reconciliation, and Electronic Health Records (EHR) Incentive Program payments, among other topics. In a related development, President Obama has signed the sequestration order for FY 2014, as required by law, although the Obama Administration's proposed FY 2014 budget, if adopted, would replace sequestration.
On April 1, 2013, CMS released the 2014 rate announcement and final call letter for Medicare Advantage (MA) and Part D prescription drug plans. Notably, under final rate announcement, CMS is forecasting that the final estimate of the combined effect of the Medicare Advantage (MA) growth percentage and the fee-for-service (FFS) growth percentage is 3.3%, compared to -2.2% in the advance call letter, which has the effect of increasing MA plan payment rates. This reversal is a result of CMS building into its spending forecast the assumption that Congress will once again override scheduled cuts in Medicare payments to physicians under the sustainable growth rate formula (thereby allowing MA plan payments to be compared to higher expected FFS spending levels). CMS also is phasing in the alignment of MA benchmarks with Medicare FFS costs and adjusting for diagnostic coding differences between MA plans and FFS providers, along with revising the risk adjustment model.
With regard to Part D, CMS notes that for the first time in the Part D program’s history, the costs of beneficiary coverage are falling, with the 2014 defined standard Part D prescription drug benefit having lower co-payments and deductible than in 2013. CMS also is adopting a number of policy changes for 2014, including requiring Part D plan retail and mail pharmacies to obtain patient consent to deliver a prescription, new or refill, prior to each delivery (CMS also encourages Part D plans to implement this consent requirement for the remainder of this year). While CMS had proposed requiring Part D sponsors to place beneficiary-level prior authorization requirements on certain categories of drugs which may be covered under the hospice or end stage renal disease (ESRD) benefits, so as to ensure that these drugs are appropriately payable under Part D before the prescriptions are filled, the final policy permits sponsors to use other approaches, such as pay-and-chase, to resolve payment responsibility in these situations.
Today, the Obama Administration released its proposed federal budget for fiscal year 2014. As widely reported, the budget incorporates an offer the President made to Congress in December 2012 to achieve nearly $1.8 trillion in additional deficit reduction over the next 10 years, including $401 billion in health savings (the Administration observes that this level of cuts would “provide more than enough deficit reduction to replace the damaging cuts required by the Joint Committee sequestration”).
Virtually all provider types – and drug manufacturers – would be impacted by the budget provisions, if adopted as proposed. The budget proposal is certainly subject to change during the legislative process, particularly as the House and Senate leadership pursue alternative budget frameworks, and indeed, gridlock could prevent significant action on entitlement reform this year. Nevertheless, the proposals bear careful monitoring because they could eventually be included in any long-elusive “grand bargain” to reform the Medicare program and reduce the federal debt.
Highlights of the Administration’s Medicare and Medicaid proposals include the following:
Medicare Provider Payments
- Reform the Medicare physician fee schedule/sustainable growth rate (SGR) formula to provide stable payments followed by payment linked to participation in an “accountable payment model.”
- Reduce Medicare coverage of bad debts from 65% generally to 25% over three years starting in 2014.
- Reduce Medicare indirect medical education add-on payments by $11 billion over 10 years.
- Reduce payment for post-acute care services in several ways.
- Reduce payment updates for inpatient rehabilitation facilities (IRFs), long-term care hospitals (LTCHs), skilled nursing facilities (SNFs), and home health agencies (HHAs) by 1.1 percentage points, beginning in 2014 through 2023 (the update could not fall below 0%). This provision would save $79 billion over 10 years.
- Adjust the standard for classifying a facility as an IRF (at least 75% of patient cases admitted to an IRF must meet one or more of 13 designated severity conditions), saving about $2.5 billion over 10 years.
- Equalize IRF and SNF payments for three conditions involving hips and knees, pulmonary conditions, as well as other conditions selected by the Secretary, saving $2.0 billion over 10 years.
- Reduce by up to 3% payments to SNFs with high rates of care-sensitive, preventable hospital readmissions, beginning in 2017, saving $2.2 billion over 10 years.
- Implement bundled payments for post-acute care providers (LTCHs, IRFs, SNFs, and HHAs) beginning in 2018. Payments would be bundled for at least half of the total payments for post-acute care providers. Rates based on patient characteristics and other factors would be set to produce a permanent and total cumulative adjustment of -2.85% by 2020. Beneficiary coinsurance would equal levels under current law. This provision would save $8.2 billion over 10 years.
- Align Medicare payments to rural providers with the cost of care, saving $2 billion over 10 years.
- Align Medicare payment for clinical laboratory services with private sector rates and encourage electronic reporting of laboratory results.
Prescription Drug Provisions
- Reduce payment for physician-administered Medicare Part B drugs from 106% of average sales price to 103% of average sales price. Manufacturers would be required to provide a specified rebate in certain instances as determined by the Secretary “to preserve access to care.”
- Provide Medicaid-level drug rebates for brand name and generic drugs provided to beneficiaries who receive Part D low-income subsidies, saving $123 billion over 10 years.
- Close the Medicare Part D donut hole by 2015, rather than 2020, by increasing manufacturer discounts to from 50% to 75% beginning in plan year 2015.
- Lower Medicaid drug costs by clarifying the definition of brand drugs, excluding authorized generic drugs from average manufacturer price calculations for determining manufacturer rebate obligations for brand drugs, making a technical correction to the Affordable Care Act (ACA) alternative rebate for new drug formulations, and calculating Medicaid federal upper limits based only on generic drug prices. These proposals are projected to save $8.8 billion over 10 years.
- Encourage the use of generic drugs by Part D low-income subsidy beneficiaries by modifying copayments, saving approximately $7 billion over 10 years.
- Improve program integrity for Medicaid drug coverage by directing states to track high prescribers and utilizers of Medicaid prescription drugs; requiring manufacturers to make full restitution to states for any covered drug improperly reported by the manufacturer on the Medicaid drug coverage list; allowing more regular audits and surveys of manufacturers to ensure compliance with Medicaid drug rebate agreement requirements; requiring drugs to be electronically listed with the FDA to receive Medicaid coverage; and expanding penalties for reporting false information for the calculation of Medicaid rebates.
- Increase the availability of generic drugs and biologics by authorizing the Federal Trade Commission to stop companies from entering into “pay for delay” agreements and modifying the length of exclusivity on brand name biologics.
Program Integrity/Efficiency Provisions
- Provide $640 million in combined mandatory and discretionary program integrity funding to implement activities that reduce payment error rates, prevent fraud and abuse, target high-risk services and supplies, and enhance civil and criminal enforcement for Medicare, Medicaid, and CHIP.
- Authorize civil monetary penalties or other intermediate sanctions for providers who do not update enrollment records and permit exclusion of individuals affiliated with entities sanctioned for fraudulent or other prohibited actions from federal health care programs.
- Expand authority to investigate and prosecute allegations of abuse or neglect of Medicaid beneficiaries in additional health care settings.
- Exclude radiation therapy, therapy services, and advanced imaging from the in-office ancillary services exception to the prohibition against physician self-referrals (Stark law), except in cases where a practice meets certain accountability standards, as defined by the Secretary.
- Require prior authorization of advance imaging services.
- Require prepayment review or prior authorization for power mobility devices.
- Allow the Secretary to create a system to validate practitioners’ orders for certain high-risk items and services.
Other Medicare Provisions
- Revise beneficiary cost-sharing requirements, including increased income-related premiums under Parts B and D, a new home health copayment, and increased premiums for beneficiaries with Medigap policies with particularly low cost-sharing requirements.
- Increase the minimum Medicare Advantage (MA) coding intensity adjustment (which decreases MA plan payments to reflect differences in coding practices between Medicare fee-for-service and MA) and align employer group waiver plan payments with MA bids, saving $19 billion over 10 years.
- Strengthen the Independent Payment Advisory Board (IPAB) by reducing the target rate of Medicare cost growth from gross domestic product plus one percentage point to plus 0.5 percentage point.
- Expand the availability of Medicare data released to physicians and other providers for performance improvement, fraud prevention, value-added analysis, and other purposes.
- Base Medicaid rates for durable medical equipment on Medicare rates to save $4.5 billion over 10 years.
- Align Medicaid Disproportionate Share Hospital (DSH) payments with expected levels of uncompensated care to save $3.6 billion over 10 years.
- Affirm Medicaid’s position as a payer of last resort when another entity is legally liable to pay claims.
A 131-page Department of Health and Human Services (HHS) “Budget in Brief” summary discusses these provisions in greater detail, and also addresses other HHS agency budget proposals and discusses HHS’s implementation of private health insurance protections and programs under the ACA.
MedPAC has released its annual report to Congress on Medicare Payment Policy, including payment update recommendations for all the major Medicare FFS payment systems and limited Medicare Advantage (MA) recommendations. The report also includes data on the status of the MA and Medicare Part D programs, including information about enrollment, plan options, and beneficiary cost-sharing. Note that while MedPAC’s recommendations are not binding, Congress and CMS often take into account MedPAC’s assessments when updating Medicare payment policies. Major recommendations include the following (many of which were included in previous reports):
- Congress should increase payment rates for inpatient and outpatient hospital prospective payment systems by 1%, and require the difference between the statutory update and the recommended 1% update be used to offset payment increases due to documentation and coding changes and to recover past overpayments.
- Congress should repeal the sustainable growth rate (SGR) system for physician services and replace it with a 10-year path of statutory fee-schedule updates. This proposal, first offered in October 2011, would combine a freeze in payment levels for primary care and, for all other services, annual payment reductions followed by a freeze. MedPAC also endorsed the collection of data to establish more accurate work and practice expense values; budget-neutral changes to improve data on which relative value unit weights are based and to redistribute payments to underpriced services, and changes to the structure of accountable care organization shared savings payments.
- Congress should eliminate the ambulatory surgical center (ASC) payment update for 2014, require ASCs to submit cost data, and direct the Secretary to implement a value-based purchasing program for ASCs by 2016.
- Congress should eliminate the skilled nursing facility market basket update, and direct the Secretary to revise the prospective payment system for SNFs and begin a process of rebasing payment as soon as practicable.
- MedPAC reiterates previous recommendations to rebase home health rates, eliminate the market basket update, revise the home health case-mix system to rely on patient characteristics to set payment for therapy and nontherapy services, establish a per episode copay for home health episodes that are not preceded by hospitalization or post-acute care use, and expand program integrity efforts.
- Congress should eliminate the update to hospice rates for FY 2014 and adopt a series of previous MedPAC recommendations addressing payment and program integrity reforms.
- Congress should eliminate the 2014 updates for outpatient dialysis services, inpatient rehabilitation facilities, and long-term care hospitals.
- With regard to Medicare Advantage, Congress should allow the authority for most MA chronic care special needs plans (SNPs) to expire (with certain exceptions) and allow MA plans to enhance benefit designs for individuals with specific chronic or disabling conditions. MedPAC also recommends that Congress permanently reauthorize dual-eligible special needs plans (D–SNPs) that assume clinical and financial responsibility for Medicare and Medicaid benefits (with certain changes) and allow the authority for all other D–SNPs to expire.
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.
Due to continuing budget gridlock in Washington, sequestration has been triggered – meaning automatic cuts to a wide range of federal programs, including Medicare payments to providers and health plans. While the Centers for Medicare & Medicaid Services has not yet announced detailed plans for implementing the sequester requirements for its programs, this Alert answers some basic questions about sequestration and how it will impact the Medicare program. Among other things, the Alert addresses what Medicare spending is impacted by sequestration, when the Medicare cuts start, and how long sequestration will last.
CMS Proposes Medicare Advantage, Part D Drug Plan Medical Loss Ratio Rule and Advance 2014 Rate Information
On February 15, 2013, CMS released a proposed rule implementing the ACA’s medical loss ratio (MLR) requirements for Medicare Advantage (MA) and prescription drug (Part C and Part D) plans. Under these provisions, which are intended to limit plan spending on marketing, overhead, and profit, MA organizations and Part D plan sponsors will be required to report their MLR, reflecting the percentage of contract revenue spent on clinical services, prescription drugs, quality improving activities, and direct benefits to beneficiaries in the form of reduced Part B premiums. CMS has generally aligned the Medicare MLR rules with commercial MLR regulations that went into effect January 1, 2011. Plan sponsors that do not have an MLR of at least 85% will be subject to payment remittance; if a plan sponsor fails to meet MLR requirements for more than 3 consecutive years, it also will be subject to enrollment sanctions and, after 5 consecutive years, to contract termination. CMS expects the first year of MLR reporting to occur in 2015 for the 2014 contract year. Comments on the proposed rule will be accepted for 60 days. The official version of the proposed rule will be published in the Federal Register on February 22, 2013.
CMS also has released the 2014 Advance Notice and draft Call Letter, which detail updates to payment methodologies, other policies, and program operations for MA organizations and Part D drug plan sponsors. CMS notes that for the first time in the Part D program’s history, the costs of beneficiary coverage are falling, with 2014 defined standard Part D prescription drug benefit having lower co-payments and deductible than in 2013. CMS also is proposing a number of policy changes for 2014, including requiring Part D plan retail and mail pharmacies to obtain patient consent to deliver a prescription, new or refill, prior to each delivery. In addition, CMS proposes to require that Part D sponsors place beneficiary-level prior authorization requirements on certain categories of drugs which may be covered under the hospice or end stage renal disease (ESRD) benefits, so as to ensure that these drugs are appropriately payable under Part D before the prescriptions are filled. Comments will be accepted until March 1, 2013. The final 2014 Rate Announcement and Call Letter will be published on April 1, 2013.
The OIG recently identified barriers to the effectiveness of the Medicare Drug Integrity Contractor (MEDIC) in performing Medicare Parts C and D benefit integrity activities between April 2010 and March 2011. For instance, the MEDIC reported that it does not have access to centralized Part C data, it lacks access to certain prescription drug event data, and there is no mechanism to recover payments from Part C or Part D plan sponsors when law enforcement agencies do not accept these cases for further action. Moreover, while the MEDIC has benefit integrity responsibility for both Medicare Parts C and D, the OIG determined that Part C investigations and case referrals represented a small percentage of its activities (only 8% of investigations and referrals involved Part C only; the majority were Part D only). The OIG makes a series of recommendations to, among other things: improve the data available to the MEDIC (including information from pharmacies, physicians, and pharmacy benefit managers); expand the ability of the MEDIC to recover payments from Part C and Part D plan sponsors; and require Part C and Part D plan sponsors to refer potential fraud and abuse incidents to the MEDIC. For details, see the full report, MEDIC Benefit Integrity Activities in Medicare Parts C and D.
The OIG’s December 2012 Compendium of Unimplemented Recommendations highlights unimplemented OIG recommendations that the OIG believes represent significant opportunities for action in FY 2013. The report includes recommendations made through FY 2011 that were not fully implemented as of December 2012. The OIG’s priority open recommendations, which in the OIG’s view represent the most significant opportunities to positively impact HHS’s programs, include the following:
- Medicare Parts A and B: Eliminate or reduce Medicare payments for hospital bad debts; adjust global surgery fees to reflect the number of evaluation and management services actually being provided by physicians; reduce the rental period for Medicare home oxygen equipment; ensure that hospice claims for beneficiaries in nursing homes comply with Medicare coverage requirements; implement unannounced site visits and other actions to prevent improper payments to independent diagnostic testing facilities; and ensure that claims for lower limb prostheses meet requirements.
- Medicare Part C/Medicare Advantage (MA): Modify payments to MA organizations; and MA aggressive marketing/ensure that new enrollees understand plan rules.
- Medicare Part D Prescription Drug Benefit: Develop a comprehensive safeguard strategy for overseeing Part D prescription drug plans; ensure the accuracy of sponsors’ cost estimates in Part D bids; ensure the validity of prescriber identifiers on claims; and ensure that Part D sponsors have information needed to make accurate coverage and reimbursement determinations for atypical antipsychotic drugs.
- Medicaid Reviews: Develop national pharmacy acquisition cost data as a benchmark for reimbursing prescription drugs; establish a connection between the calculations of Medicaid drug reimbursements and rebates; extend the additional rebate payment provisions for brand-name drugs to generic drugs; limit Medicaid payments to costs and require that payments returned by public providers be used to offset the federal share; and improve Medicaid children’s utilization of preventive screening services.
- Public Health Reviews: Centers for Disease Control and Prevention/improve states’ and localities’ medical surge preparedness for pandemics; FDA/ensure that clinical investigators disclose all financial interests; FDA/improve and strengthen food facilities’ compliance with records requirements for traceability of food products; Indian Health Service/reduce overpayments for contract health services hospital claims and cap payments for nonhospital services at Medicare rates; and National Institutes of Health (NIH)/Require NIH grantee institutions to identify, report, and address institutional financial conflicts of interest.
MedPAC is meeting on November 1 -2, 2012 to discuss a variety of Medicare policy issues, including: Medicare payment for ambulance services, reducing the hospitalization rate for Medicare beneficiaries receiving home health care, Medicare payment for outpatient therapy services, geographic adjustment of payments for the work of physicians and other health professional, the role of provider prices in determining private-plan Medicare costs relative to fee-for-service Medicare, Medicare Advantage special needs plans, and Medicare payment differences for ambulatory care services across settings.
The HHS Office of Inspector General (OIG) has released its FY 2013 Work Plan, which outlines audit, inspection, and investigative initiatives that the OIG intends to conduct in the coming year. The OIG plans activities in a wide range of areas, including reviews of Medicare fee-for-service reimbursement and program integrity policies involving virtually all types of providers and suppliers (with a heavy concentration of reviews involving hospitals and medical equipment suppliers). The OIG also will focus attention on Medicare Advantage and Medicare Part D prescription drug plan policies, including payment policy and plan oversight reviews. Numerous Medicaid reports also are on the books, including investigations involving Medicaid prescription drug pricing and rebate policies, various provider and supplier payment issues, and state management of their Medicaid programs. The Work Plan also includes numerous reviews involving other HHS agencies, such as reviews targeting Food and Drug Administration (FDA) and National Institutes of Health programs. The Work Plan also includes a description of the OIG’s legal and investigative activities related to Medicare and Medicaid.
The 2013 Medicare Open Enrollment Period runs from October 15 to December 7, 2012. To help beneficiaries make informed choices, CMS has posted updated quality rating information for Medicare Advantage plans and Part D prescription drug plans for the coming year. An HHS press release summarizing the data and providing links to additional information is available here.
A number of recent Congressional hearings have focused on health policy issues, including the following:
- A House Small Business Healthcare Subcommittee hearing on “Medicare's Durable Medical Equipment Competitive Bidding Program: How Are Small Suppliers Faring?”
- Senate Aging Committee hearings on “Implementing the Physician Payments Sunshine Act” and “Eliminating Waste and Fraud in Medicare: An Examination of Prior Authorization Requirements for Power Mobility Devices.”
- A House Oversight Committee hearing entitled “Administration's Failure to Prevent/End Medicaid Overpayments.”
- House Ways and Means Committee hearings on (1) implementation of ACA health insurance exchanges and related provisions; (2) the status of Medicare Advantage (MA) plans; and (3) the Internal Revenue Service’s (IRS) implementation of various ACA tax provisions.
- A House Energy and Commerce Committee hearing on HHS’s use of special hiring authorities under Title 42 to appoint and compensate specialized science and research positions.
The Government Accountability Office (GAO) has issued a report entitled “Medicare Special Needs Plans: CMS Should Improve Information Available about Dual-Eligible Plans' Performance.” The report examines the characteristics of dual-eligible beneficiaries enrolled in Medicare Advantage plans known as dual-eligible special needs plans (D-SNPs), which serve Medicare beneficiaries who also are eligible for Medicaid because they meet income and other criteria. About 9% of the dual-eligible population is enrolled in 322 Medicare D-SNPs, and they were more frequently under age 65 and disabled, more likely to be eligible for full Medicaid benefits, and more frequently diagnosed with a chronic or disabling mental health condition than beneficiaries in other MA plans. The GAO found that D-SNPs provide fewer supplemental benefits on average than other MA plans, yet spend proportionately more of their rebate to fund supplemental benefits and less to reduce Medicare cost-sharing. The GAO recommends a number of steps CMS should take to increase D-SNPs' accountability, including: requiring D-SNPs to state explicitly in their models of care the extent of services they expect to provide; requiring D-SNPs to collect and report to CMS standard performance and outcome measures; and analyzing and publicizing the performance and outcomes data.
Recent Congressional hearings have focused on the following health policy issues, among others:
- A House Ways and Means Health Subcommittee hearing entitled “Physician Organization Efforts to Promote High Quality Care and Implications for Medicare Physician Payment Reform";
- A Senate Commerce, Science and Transportation Committee hearing on short-supply, “gray market” prescription drugs; and
- A House Oversight and Government Reform Committee hearing on the Obama Administration’s Medicare Advantage Quality Bonus Payment Demonstration. The Panel also has scheduled an August 2 hearing on IRS enforcement of the ACA’s tax provisions.
MedPAC has released its 2012 Data Book on “Health Care Spending and the Medicare Program.” The publication provides information on national health care and Medicare spending, Medicare and dual-eligible beneficiary demographics, Medicare quality, and Medicare beneficiary and other payer liability. It also includes data regarding various provider types, such as data on Medicare spending, beneficiary utilization of the service, number of providers, volume, length of stay, and Medicare profit margins. The Data Book also covers the Medicare Advantage and Part D drug programs.
On June 11, 2012, CMS published corrections to the May 11, 2012 proposed rule to update Medicare inpatient prospective payment system (IPPS) hospital and long-term care hospital prospective payment system (LTCH-PPS) payment and other policies for fiscal year (FY) 2013. Among other things, CMS is decreasing the national capital standard federal payment rate, which in turn decreases the standardized amount used to calculate IPPS payment rates from $5,750.04 to $5,748.09. As a result, proposed payment amounts for 2013 would be slightly lower than previously calculated. CMS also clarifies its preamble discussions of qualifications for LTCHs and calculation of outlier payments and corrects technical and typographical issues. CMS also has published corrections to technical and typographical errors in its April 12, 2012 final rule with comment period updating Medicare Advantage (MA) and Medicare Part D prescription drug program rules for contract year 2013.
In a recent report, “Medicare Advantage: Quality Bonus Payment Demonstration Undermined by High Estimated Costs and Design Shortcomings,” the GAO recommends that CMS cancel its Medicare Advantage (MA) Quality Bonus Payment Demonstration and allow the MA quality bonus payment system established by the ACA to take effect. The CMS demonstration, announced in November 2010, provides bonus payments to MA plans with 3 or more stars under a quality rating system and accelerates and increases bonuses for plans with higher quality ratings than envisioned under a separate ACA bonus structure. The GAO reports that the demonstration will cost $8.35 billion over 10 years, dwarfing all other Medicare demonstrations, and that most of the funds will be paid to average performing plans. Moreover, the demonstration's design precludes a credible evaluation of its effectiveness in achieving CMS’s stated research goal of determining whether its bonus structure boosts quality improvement more than the ACA structure.