Congress ‘Asleep at the Switch’ as Biden Continues Trump-Era Ploy to Privatize Medicare

Yves here. We’ve been posting from time to time about how the UK has been moving to privatize the NHS by cutting service levels and response times and telling patients to go to private doctors if they want better. As this article describes, Medicare is en route to be privatized through the implementation of direct contracting, tossing the program over to investors and profiteers.

Please contact your Senators and Congressman pronto and voice your object in the most stringent possible terms. This bait and switch is being done behind Cnogress’ back, and it’s time they woke up and intervened.

By Jake Johnson. Originally published at Common Dreams

A Trump-era pilot program that could result in the complete privatization of traditional Medicare in a matter of years is moving ahead under the Biden administration, a development that—despite its potentially massive implications for patients across the U.S.—has received scant attention from the national press or Congress.

“If left unchecked, the Direct Contracting program will hand traditional Medicare off to Wall Street investors.”

On Tuesday, a group of physicians from around the nation will try to grab the notice of lawmakers, the Biden White House, and the public by traveling to Washington, D.C. and demanding that the Health and Human Services Department immediately stop the Medicare experiment, which is known as Direct Contracting (DC).

The doctors plan to present HHS with a petition signed by more than 1,500 physicians who believe the DC pilot threatens “the future of Medicare as we know it.”

Advocates have been publicly sounding the alarm about the DC program for months, warning that it could fully hand traditional Medicare over to Wall Street investors and other profit-seekers, resulting in higher costs for patients and lower-quality care.

“Everything we know about Direct Contracting should be cause to halt the pilot,” Diane Archer, the founder of Just Care USA and the senior adviser on Medicare at Social Security Works, told Common Dreams in an email. “Direct Contracting effectively eliminates the more cost-effective traditional Medicare program designed to ensure that people with complex health conditions get the care they need.”

“The Direct Contracting experiment is likely to be both a healthcare policy and a political nightmare,” Archer argued. “We already know from the Medicare Advantage experiment that Direct Contracting won’t save money, nor will it be able to show improved quality.”

But healthcare campaigners’ concerns have fallen largely on deaf ears in Congress and the Biden administration, which has allowed much of the pilot program to proceed as planned.

In a phone interview with Common Dreams ahead of Tuesday’s demonstration at HHS headquarters, Dr. Ed Weisbart—chair of the Missouri chapter of Physicians for a National Health Program (PNHP)—said that Congress is largely “asleep at the switch” as Wall Street-backed startups and private insurance giants close in on traditional Medicare, a 56-year-old program that covers tens of millions of U.S. seniors.

“People don’t know that it’s happening,” Weisbart, one of the physicians traveling to the nation’s capital, said of the DC experiment. “Most people in Congress don’t know that it’s happening. We’ve started having some of these conversations with congressional staff, and we’re hoping to have many more of them next week when we’re there, but it’s not on their radar either.”

“That’s the disturbing part,” he added. “How radical the transformation of Medicare is becoming under this new model, how widespread it will be—it’ll be the entire book of business—and yet that’s occurring with neither the awareness nor consent of Congress.”

The DC program was established by the Center for Medicare and Medicaid Innovation (CMMI) during the waning months of the Trump administration, which included former pharmaceutical industry executives, Wall Street bankers, and right-wing policy consultants notorious for gashing public health programs.

Under the DC model, so-called Direct Contracting Entities (DCEs) are paid monthly by the Centers for Medicare and Medicaid Services (CMS) to cover a specified portion of a patient’s medical care—a significant shift from traditional Medicare’s direct reimbursement of providers.

DCEs are allowed to pocket the funding they don’t spend on care, an arrangement that critics believe will incentivize the private middlemen to skimp on Medicare patients—many of whom could be auto-enrolled into DCEs without their knowledge or permission.

According to a policy brief released by PNHP, “Virtually any company can apply to be a DCE, including investor-backed startups that include primary care physicians, [Medicare Advantage] plans and other commercial insurers, accountable care organizations (ACOs) or ACO-like organizations, and for-profit hospital systems.”

“Applicants are approved by CMS without input from Congress or other elected officials,” the group notes.

At present, the pilot includes 53 DCEs in 38 states, Washington, D.C., and Puerto Rico. Drs. Richard Gilfillan and Donald Berwick pointed out in a September article for Health Affairs that 28 of the current DCEs are controlled by investors, not healthcare providers. A second tranche of DCEs is expected to debut in January 2022.

Dr. Ana Malinow, a physician from San Francisco who is taking part in Tuesday’s petition delivery, said in a statement that “Medicare Advantage—the first wave of Medicare privatization—showed us that inserting a profit-seeking middleman into public coverage does not save money for taxpayers, but rather costs more money while also taking away care choices from seniors.”

“If left unchecked, the Direct Contracting program will hand traditional Medicare off to Wall Street investors, without input from seniors, doctors, or even members of Congress,” said Malinow. “Health and Human Services Secretary Xavier Becerra has the power to stop this Trump-era program in its tracks, and must do so now.”

The DC experiment was launched by the Trump administration but actually has its roots in the Affordable Care Act (ACA), which established CMMI with the stated goal of identifying “ways to improve healthcare quality and reduce costs in the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) programs.”

The ACA granted CMMI, also known as the Innovation Center, the authority to test alternative payment and service delivery models on a national scale without congressional approval—latitude that, in the hands of the Trump administration, ultimately spawned the DC pilot program.

CMMI is currently headed by Elizabeth Fowler, who previously served as vice president of public policy and external affairs for WellPoint, Inc.—a health insurance giant that later became Anthem. Fowler also worked as chief health counsel to former Senate Finance Committee Chair Max Baucus, a right-wing Democrat who infamously had single-payer proponents arrested in 2009 and helped ensure that the ACA did not include a public option.

Weisbart told Common Dreams that while the creation of CMMI may have been well-intentioned, the body’s ability to “so fundamentally and radically transform a public health program that so many Americans rely on” without congressional approval or oversight is a real danger that lawmakers must take seriously.

“Someplace there needs to be congressional oversight,” Weisbart said. “When the public does finally find out that [lawmakers] were asleep at the switch, they’re not going to be happy. This is your chance to do what democracy is intended to do.”

The Biden administration paused the most extreme form of Direct Contracting—known as the Geographic (GEO) model—in March, but it is allowing the Global and Professional Direct Contracting (GPDC) pilot to move forward. According to CMS, the GPDC pilot is expected to play out over a six-year period.

While lawmakers have largely been quiet about the Medicare experiment, a handful of Democratic members of Congress have echoed grassroots demands for an immediate end to the DC program in recent months.

“We appreciate that you paused implementation of the Geographic model,” Reps. Lloyd Doggett (D-Texas.) Bill Pascrell (D-N.J.), Mark Pocan (D-Wis.), Lloyd Doggett (D-Texas) wrote in a May letter to Becerra and then-Acting CMS Administrator Elizabeth Richter. “However, we remain worried that the 53 DCEs participating in the GPDC model, a policy launched under the Trump administration, lacks oversight to protect Medicare beneficiaries’ care.”

“As members of Congress committed to protecting Medicare beneficiaries,” the lawmakers continued, “we ask that CMS immediately freeze the harmful CMMI DCE pilot program including the Geographic model and the Global and Professional Direct Contracting Model and evaluate the impact to beneficiaries.”

In September, Porter took part in a PNHP-hosted webinar that spotlighted the potentially far-reaching harms of the DC pilot.

“This program was supposed to make Medicare more efficient,” said Porter. “But actually it does just the opposite. Rather than allowing patients to go to providers directly under traditional Medicare, DCEs invite insurers and investors to step in and interfere with the care that Americans get.”

“This Direct Contracting Entity model is just one more example of the Trump administration’s many attempts to wreck a functioning, successful, popular government program for the sake of lining the pockets of its corporate donors,” Porter added. “The bottom line for Direct Contracting Entities is not to improve the quality of care. They drive up costs for patients to maximize their profits.”

In a column earlier this month, the Houston Chronicle‘s Chris Tomlinson argued that the Biden administration’s decision to allow the DC program to continue “reflects for-profit health companies and investors’ power over both political parties.”

“Direct Contracting is also likely to kill any chance for progressive Democrats to make Medicare an option for any American who wants to enroll,” Tomlinson added. “If the government puts private companies in charge of all Medicare patients, it will eliminate any opportunity to overhaul our healthcare system truly.”

“Next year,” he added, “millions more Americans will find themselves in privatized Medicare, and most will never know what happened.”

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  1. DJG, Reality Czar

    Weisbart told Common Dreams that while the creation of CMMI may have been well-intentioned, the body’s ability to “so fundamentally and radically transform a public health program that so many Americans rely on” without congressional approval or oversight is a real danger that lawmakers must take seriously.

    This is all too familiar. And the idea that this privatization is going on without the knowledge of the Congress is simply an excuse. Not even a good excuse.

    The same pressures are being brought to bear on Social Security.

    The citizenry, having been fed bloviations for years about the efficiencies of the market, doesn’t resist.

    We all have known for years that both parties favor privatization, looting, skimming, and grifting. After all, the Clintons run the Democratic Party and Trump has taken over the Republican Party (from its “compassionate conservative” wing).

    Congress also hasn’t noticed the endless wars in the Middle East from Yemen and Libya to Afghanistan. A coincidence?

    1. ambrit

      This “compassionate obliviousness” on the part of Congresscreatures could also be a desired outcome of the “Official” Party Apparat’s enforcement of money raising on the part of said Congresscreatures. For the Democrat Party side of the “split,” the rule requiring successful candidates for Congressional office to spend so many hours a day “moneyraising” distracts the Creature from actually governing. Thus, the Creature relies much more on “aides” and “experts” to manage the information flow and decision making process.
      Money corrupts Politics.
      Any Candidate for national level political office that promises to clean out the Augean Stables that the District of Colombia has become, and actually carries out even a small part of those promises, will be hailed as a ‘National Savior’ and really have his or her head carved on Mount Rushmore. I leave it to the imagination of the reader to conjure up an image of what the socio-political ‘Rivers’ will be that accomplish this Herculean labour.

  2. diptherio

    The political ratchet in full effect, here: the Republicans move things to the right, and the Democrats make sure they don’t move back to the left. I hope that the physicians raising a stink can sink this, but I’m not holding my breath. All of the investors in both political parties are aligned on the same side of this issue, which doesn’t bode well for the outcome. By all means though, call your congresscritter and give them (or at least their staffers) an earful. Maybe together we can terrify the scoundrels into doing the right thing. And on behalf of all Montanans, I apologize for the existence of Max Baucus. Familyblog that guy.

  3. ArkansasAngie

    A problem with capitalism is that the size of an entity impacts the power of the entity to ignore negative feedback from its clients and suppliers. Without the feedback capitalism isn’t capitalism any more. The larger the entity the more of a monopoly it becomes.

    Viva Sherman antitrust!

    DCE’s are the new monopolies

  4. Joe Wella

    When I was volunteering for the Bernie campaign, there was a strong sense among everyone that even if the whole effort was quixotic, the stakes were too high not to try. How right we were, except perhaps in the specific horse we were backing (but who else was there?).

    It was horrifying how many older Dems were smug turkeys led by MSNBC into voting for Christmas, unwilling to admit that the hospital bed and the nursing home were probably in their near futures.

    I will admit to a tiny bit of Shadenfreude that even though I may spend my golden years in some kind of Mad Max world or just an underdeveloped US without hospitals or drinkable tap water, they may have it worse with the privatized Medicare they voted for. But only a tiny bit when I think of what Americans have to go through caring for elderly relatives.

  5. Henry Moon Pie

    On top of this is an all-out effort to switch everyone to Medicare Advantage despite the increasingly bad reputation that program bears. TV ads now tout “Medicare Part C” with all the “add-on benefits you deserve. “Medicare Advantage” only appears in small print in the ad.

    The bottom line is that politicians prefer that insurance companies manage the “death panels” rather than the government. Too much nasty feedback comes in response to that vulturistic activity. So the feds hand it off to United Healthcare and the insurance boys get a nice chunk of change in return.

    1. Arizona Slim

      Interestingly enough, the barrage of Medicare Advantage mailings has suddenly stopped coming to the Arizona Slim Ranch. And, darn. My poor paper shredder is still hungry!

    2. Questa Nota

      That deluge of television ads for Medicare peddlers demonstrates how much money must be at stake. Siphon off a little to pay the pols and there is plenty left to fund new research to trim this, cut that, lengthen the wait times and otherwise maximize shareholder value.

      Neo-Lib Conundrum, how to pluck the old geese without killing them too fast and scrambling those golden egg yolks. Healthcare variant mutation of that Goldman gaffe about cures not being a sustainable business model.

  6. TMoney

    Congress isn’t asleep. They are wide awake and most of them are likely positioned to profit – either via campaign donations or family connections or the stock market.

    Behold the power of the purse !

    1. ambrit

      As the song supposedly goes:
      “Switchman sleeping, Bill Hundred and Two,”
      “Is on the fast track, and headed for you.”
      “Riden’ that train (gravy,)”
      “High on cocaine,”
      “Hunter B you like to,”
      “Watch them bleed.”
      [Sorry for the inferior nature of the doggerel.]

  7. orlbucfan

    You can bet the Congressional yahoos in both chambers will keep their gold plated healthcare. That’s right and the duped American citizenry will continue to foot the bill. I never bought the Medicare Advantage (family blog). I sure as ( family blog) will keep an eagle eye out for this scam. Thanks Yves, Lambert, Jerri-Lynn and the NC stalwarts for keeping me in the informed loop!

  8. Tangled up in Texas

    Those petitions were delivered to HHS yesterday, Laughingsong.

    On Tuesday, Nov. 30, PNHP president Dr. Susan Rogers led a delegation to the doorsteps of the Dept. of Health and Human Services in Washington, D.C. to deliver 13,000+ petitions demanding an end to Medicare Direct Contracting."

    1. ambrit

      We have already had ample evidence as to the complete uselessness of “petitions” in changing the Elite’s looting programs. It’s time to start “cleansing the stables.”

  9. JTMcPhee

    The VA is pulling the same sh!t with “Community Care,” sending us to “approved” non-VA doctors and clinics and not filling internal VA provider positions. This has been going on and Obama “warned” about how much a 1% increase in utilization of VA, then 34% of veterans , would cost. ( (Over 70 percent of veterans do not use the VA, either through not needing it, employer health benefits, or no access.”

    Corruption and crapification, all the way down…

  10. TBellT

    I’ve said this here before but DCE will get as many beneficiaries as Pioneer and NextGen ACO’s did. Provider interest just isn’t there. The ones in it are just proceeding with inertia.

    If a provider group wants to take that level of capitated “risk” they’re just better off making a Medicare Advantage plan. There might be higher logistical hurdles to set up an MAO and then convince patients to sign up for MA; but the potential profits from the lopsided way we currently pay MA plans almost certainly dwarfs what they would get on the DCE side. Look at consultant literature to these orgs and it will say the same thing. If they’re skittish the recommendation is one of the MSSP tracks.

    Projection: Absent changes to MA payment rates, in the next 10 years MA will certainly have over half of Medicare enrollees and I think probably closer to 60-65%. Meanwhile DCE’s will still be piddling around with a couple million, if that.

  11. Fred

    Bottom line, price of B, D and F went up. Especially D as Cigna bought out Express Scripts and they are going to pay for it on their subscribers back.

  12. djrichard

    Reminds me of the Don Fanucci character in Godfather part II, “You should let me wet my beak a little… Tell your friends I don’t want a lot. Just enough to wet my beak.” Fed Gov being responsive to the request, proceeds to create entry points for the Don Fanuccis in the healthcare industrial complex.

  13. Susan the other

    Wall Street is canabalizing society. We should demand that Wall Street first prove its social benefit by contracting with itself. Let’s demand that Wall Street prove it can organize a better health care delivery system by having every investing entity contract with another to provide them with health care. If they can achieve a good result and everyone is happy and saves money then perhaps we could do a pilot program for Medicare – just a small section of the country as an experiment. And then based on Wall Street’s and PE’s performance in both tests for providing good health care at low Medicare rates and strict caps on revenue, etc. then we could all look at this experiment; it should be a 10-year experiment for investors to prove themselves. This raises the question, Why doesn’t the financial world ever run real-life experiments to see just how effective they are? That would be a good way to determine if they are actually capable of delivering anything good to society.

    1. ambrit

      Alas, your last question was rhetorical.
      Wall Street is not in the least interested in the welfare of the society. [I assume that to be ‘understood’ by all.]
      We are headed into Revolutionary territory. This is understood as being a corollary to the decades old Counter Revolution going on in America.

  14. John

    I would summarize the privatizing of Medicare by Lambert’s Simple rules of Neo-liberalism: #1 Because markets. #2 Go die

    …of course this is true of everything.

  15. Jackman

    And sure enough, as if on cue, today in our wonderful New York Times there’s a big, bold, long article headlined: Democrats’ Bill Would Go Far Toward ‘Patching the Holes’ in Health Coverage. Just in case any Democrats doubted for a moment that their party isn’t working overtime in their corner. But patching the holes in our health coverage is like patching the roof at Treblinka.

  16. Hepativore

    There is probably a large push behind the scenes on Biden’s part as well as Congress to cement the Direct Contracting program in place as well as fast-track the privatization of Social Security. This is because the Clinton-Obama Democrats have been looking for a political opening to dismantle these programs for years but were afraid of the political blowback, so they have been waiting for a chance to do so on the sly, and Biden also has wanted to take a hacksaw to the programs for decades.

    The timing of right now is crucial for Biden and the Democrats, as they have probably already written off their chances of keeping either the House or Senate during the midterms and they feel that they are going to take a loss for the 2024 presidency as well. If they can hurry up now, they can quietly let the Direct Contacting program go into effect as well as finish concocting some foul iteration of the Grand Bargain. Then by the time anybody notices, it will be too late to do anything and then the Democrats can blame the aftermath on the Republicans after the Republicans ride the red wave back into the White House. Then the Democrats can sit back and relax having gotren their real priorities accomplished; while fundraising off of Republican malfeasance during the next few years.

    Now, the Republicans have also been trying to put Medicare and Social Security on the chopping block for years. However, the party leadership has not been nearly as brazen about it as the Third Way Democrats, possibly for fear of angering the Republican base which traditionally consists of older voters. When W. Bush tried to cut Social Security in 2005, the Congressional Democrats aided and abetted him every step of the way and was only stopped at the last moment by his fellow Republicans.

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