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Study: Tens of Billions of Dollars at Stake with CBO’s Fuzzy Math on Healthcare Programs

by Kevin Glass / /

A new study out from the National Taxpayers Union Foundation concludes that the Congressional Budget Office, Congress’ independent budget scorekeeper, has been mis-portraying the cost savings of projects launched by the Center for Medicare and Medicaid Innovation, with huge consequences for taxpayers. “CBO’s forecast that CMMI would reduce Medicare spending by $45 billion over ten years is flawed,” concluded study author Doug Badger, a former White House and Senate policy adviser who had a key role in developing Medicare Part D. The CBO’s estimates “ascribe unobserved and unobservable savings to projects that CMMI has not yet undertaken (and may never undertake).”

CBO’s assumptions about CMMI have wide-ranging repercussions for the federal budget, from the assumed savings of CMMI programs that may never materialize to scoring cost-saving Medicare legislation as actually increasing costs if it conflicts with the work of CMMI. CBO would score any legislation from Congress enacting real spending reductions in this area “as a spending hike if it believes that CMMI might test a similar policy at some point in the future,” Badger writes.

“It is time to evaluate how CBO has constructed the ‘scoreboard’ for CMMI, so as to ensure that meaningful statistics are informing the true state of play,” Badger concluded.

The study is part of NTUF’s “Taxpayers’ Budget Office,” established last year to serve as a watchdog for CBO’s processes and provide constructive criticism on how the agency can refine its methods. NTUF President Pete Sepp added, “this and future work from the Taxpayers’ Budget Office is designed to provide for CBO what the Shadow Open Market Committee has provided for the Federal Reserve – a measure of balance, oversight, and meaningful dialogue that improves the quality of policymaking. No other initiative today is more intensely focused on this vital, overlooked part of the budget process.”

National Taxpayers Union Foundation is the research and educational arm of National Taxpayers Union, “The Voice of America’s Taxpayers.” Note: Resetting the Scoreboard: Why CBO Should Abandon Its Flawed Analysis of the Center for Medicare and Medicaid Innovation, is available at taxpayersbudgetoffice.org.