ALWAYS IN JEOPARDY? The future of Medicare

 After two years of a pandemic that’s caused people to question health care, one would think a scheme to squeeze for-profit corporations between seniors and their Medicare benefits would result in protests. But as much of the press has focused on Critical Race Theory, mask-wearing, inflation, and Russia’s invasion of the Ukraine, it’s been a stealth attack on Medicare.

Resisting requests to drop a controversial health-care pilot program launched by Donald Trump, the Biden administration on Feb. 24 announced it’s redesigning and rebranding Direct Contracting, which critics say is another step toward privatizing Medicare.

Instead of ending Direct Contracting, the Centers for Medicare and Medicaid Services (CMS) gave the program a new name: ACO REACH (Accountable Care Organization Realizing Equity, Access and Community Health).

The program is set to take effect on January 1.

Under Direct Contracting, corporate participants were paid monthly by CMS to cover a specified portion of a patient's medical care. The companies – most of which are controlled by investors not health-care providers –are allowed to pocket funds they didn't spend on care.

Physicians for a National Health Program (PNHP) issued warnings about ACO REACH/Direct Contracting:

* ACO REACH will pay middlemen a flat fee to "manage" seniors' health, allowing them to keep 40% of what they don’t spend on care.

* Traditional Medicare beneficiaries will be automatically enrolled in ACO REACH entities without their full understanding or consent, and once enrolled cannot opt out of an ACO REACH unless they change primary-care providers.

* Like Direct Contracting, ACO REACH has virtually no limits on what type of company can participate; participants can be owned by commercial insurers, private-equity investors, and other profit-seeking firms, including current Direct Contracting entities.

* ACO REACH increases provider governance from 25% to 75%, but the companies are ultimately accountable to investors.

 

"ACO REACH is Direct Contracting in disguise," said Dr. Susan Rogers, a physician and PNHP president. "This new model doubles down on Direct Contracting's fatal flaws, inserting a profit-seeking middleman between beneficiaries and their providers.

"You can't slap a Band-Aid on a tumor and call it cured," she continued. “Direct Contracting—now ACO REACH—threatens the health of beneficiaries and the future of traditional Medicare. As physicians committed to the health of our patients, we urge HHS to abandon this rebranding effort and focus the agency's efforts towards strengthening and protecting traditional Medicare.

“The goal is to privatize all of Medicare through this program,” she added.

In Washington, Congresswoman Pramila Jayapal (D-Wash.) last month got 50-some House Democrats to sign a letter to Xavier Becerra, Secretary of Health and Human Services, demanding an end to Direct Contracting.

"Trump-era Direct Contracting is a major threat to Medicare coverage, hidden in bureaucracy," said Jayapal, chair of the Congressional Progressive Caucus, adding that she’ll “fight tooth and nail against any and all efforts to privatize Medicare."

Also in February, Sen. Elizabeth Warren (D-Mass.), chair of the Senate Finance subcommittee on fiscal responsibility and economic growth, blasted Direct Contracting, saying it features “corporate vultures … already scamming Medicare.

“President Biden should not permit Medicare to be handed over to corporate profiteers,” Warren said. “Doing so is going to increase costs … The Biden administration should shut down the Direct Contracting model.”

 

Besides seemingly endless TV commercials featuring celebrities such as ex-NFL quarterback Joe Namath and former sitcom star Jimmie J.J. Walker hawking Medicare Advantage, retired Americans have received letters from CMS letting them know that their physicians are now part of Direct Contracting.

Although the government correspondence notes, “Medicare benefits have not changed” and “no action needed,” it comes across as, “Nothing to see here … don’t worry.”

However, health-care advocates seem to be saying, “Be afraid. Be very afraid,” as it’s said in the film The Fly.

“What Direct Contracting does is turn the public side of Medicare into a corporate gold mine,” said Diane Archer, president of Just Care USA.

Traditional Medicare reimburses health-care providers at set rates.

“Medicare was designed as a lifeline for America’s seniors and those with disabilities, not a playground for Wall Street investors,” Rogers said. “If middlemen in health care actually saved money and improved outcomes, the U.S. wouldn’t have the most expensive and ineffective health-care system in the world. We don’t need to put seniors through another failed experiment to prove this.”

Medicare Advantage since the Reagan administration has inserted the involvement of private insurance companies, some of which have used “up-coding” (where insurers exaggerate patients’ medical needs and risk assessments to maximize payments, but then minimize actual services, keeping the difference).is private insurance offered instead of and through Medicare, which costs taxpayers more, Archer says.

Direct Contracting /ACO REACH is Medicare Advantage under another name, except it’s not voluntary.

“The insurance companies are making twice as much money from Medicare Advantage than they do from employer-sponsored health insurance,” according to Dr. Ana Malinow, a University of California-San Francisco pediatrics professor. “Workers have no more money, employers don’t, but who does? The government.”

Direct Contracting, which also added a third party when it launched in 2020, is worse, critics say, because it works with seniors who declined Medicare Advantage, and it’s difficult to opt out.

Traditional Medicare administrative costs are in the single digits; Medicare Advantage is limited by law to less than 15%; DC has no limits.

“If the government has its way, by the end of the decade, every beneficiary of the traditional, entirely public Medicare will have a private, for-profit entity jammed between them and their health care,” wrote said Chicago journalist BrankoMarcetic, author of Yesterday’s Man: The Case Against Joe Biden.

“The largest remaining segment of the U.S. health-care system not dominated by corporate hands will become something else,” he said in Jacobin magazine.