The GAO has released a report entitled “Medicare Advantage Organizations: Actual Expenses and Profits Compared to Projections for 2006.” The GAO found that MA organizations reported earning average profits of 6.6% of total revenue in 2006, compared to projected profits of 4.1%, and they reported spending an average of 83.3% of total revenue on medical expenses compared to projections of 86.9%. The GAO points out that if MA organizations had more accurately projected both their revenues and expenses, they would have been able to provide beneficiaries with additional benefits or cost-sharing reductions, and still maintain the level of profits projected. In a separate report, “Medicare Advantage: Characteristics, Financial Risks, and Disenrollment Rates of Beneficiaries in Private Fee-for-Service Plans,” the GAO found that beneficiaries in private fee-for-service (PFFS) plans in April 2007 tended to be healthier and generally younger than beneficiaries in other MA plans. Moreover, Medicare PFFS beneficiaries may have faced certain financial risks if they did not contact their plan before receiving services that generally were not assumed by beneficiaries in other MA plans and Medicare FFS.  The GAO also found that some PFFS plans were inappropriately using the term prior authorization in their informational materials when such plans were not permitted to deny service coverage due to lack of prior plan approval. The GAO observes that CMS guidance on this issue has been inconsistent and sometimes incorrect. Finally, the GAO found that from January through April 2007, beneficiaries in PFFS plans disenrolled at an average rate of 21% compared to 9% for other MA plans, and while CMS has not complied with statutory requirements to mail disenrollment rates to Medicare beneficiaries. GAO recommends that CMS (1) investigate the extent to which PFFS beneficiaries face unexpected costs for not contacting their plan before receiving care, (2) ensure that CMS guidance on prior authorization reflects CMS policy, and (3) mail MA plan disenrollment rates to beneficiaries, as required by statute, and update rates on Medicare’s web site.