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GAO Is ‘Concerned’ about the Legality of Obama’s Senior Swindle

5:21 PM, Jul 11, 2012 • By JEFFREY H. ANDERSON
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Now that Americans are becoming more acutely aware that Obamacare would be funded in large part through higher taxes, it’s all the more crucial for President Obama to keep voters from discovering the overhaul’s other principal source of funding — its Medicare raid. 

health care

Fortunately for Obama, his administration recently launched the $8.35 billion Senior Swindle, a taxpayer-financed “demonstration project” to hide the vast majority of Obamacare’s Medicare Advantage cuts from seniors until after what he likes to call his “last election.” Unfortunately, the Government Accountability Office (GAO) — the independent, nonpartisan congressional watchdog — has identified this “demonstration project” as a sham.  And now, in a newly released letter, the GAO raises continuing concerns about the gambit’s legality.

Highlighting the project’s myriad “design shortcomings,” including its excessive focus on 2012 (imagine that), its awarding “most” of its “quality bonuses” to average-performing plans, and its lack of a control group, the GAO — not known for its bluntness — previously concluded that Obama’s secretary of Health and Human Services (HHS) Kathleen Sebelius “should cancel” the project and perhaps, sometime in the future, consider “conducting an appropriately designed demonstration.”

The GAO also previously observed that the demonstration “does not…conform to the principles of budget neutrality.” That’s a polite way of saying that the administration is running up the national debt by another $8.35 billion in order to boost Obama’s reelection prospects.

For context, that $8.35 billion tally — which is being put on the taxpayers’ tab — is more than 47 times the $177 million combined sum that Obama, Mitt Romney, the Democratic National Committee, and the Republican National Committee, raised last month. 

And now, in a letter to Sebelius dated July 11, 2012 and obtained by THE WEEKLY STANDARD, Lynn Gibson, the GAO’s general counsel, writes that the GAO remains “concerned” about the administration’s “legal authority to undertake the demonstration.”  Gibson writes,

“Our findings during the course of our evaluation of the demonstration…raised concerns about whether the demonstration falls within HHS’s section 402 authority, and resulted in our solicitation, by letter of January 10, 2012, of the views of the General Counsel of HHS regarding this issue.  By letter of February 10, 2012, the Deputy Director of the Center for Medicare within the Centers for Medicare & Medicaid Services (CMS) responded to our inquiry.  CMS’s response, however, does not explain how the MA Quality Bonus Payment Demonstration comports with its section 402 authority.  To the contrary, as [is] discussed in detail below, we remain concerned about the agency’s legal authority to undertake the demonstration….

The GAO’s letter concludes:

“Section 402(a)(1)(A) provides the Secretary broad authority to modify methods of payment under Medicare to establish additional incentives to increase the economy and efficiency of services provided under the program by carrying out experiments and demonstration projects.  This authority, however, is not unlimited….[D]emonstrations under which these payment changes are initiated must meet the criteria set forth in the statute.  CMS has not established that [these necessary]…elements [are] present in the MA Quality Bonus Payment Demonstration.”

In addition to questioning the legality of this “demonstration project,” the GAO has also highlighted the project’s truly extraordinary scope: The GAO notes that there have been 85 other Medicare demonstration projects conducted in the 17 years since 1995.  According to the GAO, Obama’s $8.35 billion gambit will cost more than all 85 other Medicare demonstration projects combined.

Welcome to the wonderful world of politicized medicine.

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