Under the Trump regime, it was common for corporate executives who were brought into government with myriad conflicts of interest, to propose profit-making schemes that would enrich themselves and their allies at the expense of the public. Such a plan was launched as an experiment within the popular traditional Medicare program, and to the dismay of many in the medical community, continues under the Biden administration.
The program, known as Direct Contracting, shifts traditional Medicare’s system of direct reimbursements to providers, to instead paying something called Direct Contracting Entities monthly, covering a specified portion of a patient’s medical care. The system allows them to pocket the funding they don’t spend on patient care, that critics believe will incentivize private middlemen to withhold needed care to Medicare patients, while increasing the cost to taxpayers.
Health care observers warn that Medicare Direct Contracting, now operating 53 units in 38 states, Washington D.C. and Puerto Rico, could hand traditional Medicare over to Wall Street investors and other profit-seekers, resulting in substandard care, while raising the costs of Medicare. Between The Lines’ Scott Harris spoke with Kay Tillow, chairwoman of the group Kentuckians for Single-Payer Health Care, who discusses growing concerns about Direct Contracting, and the efforts now underway to pressure President Biden and Congress to end the program.
KAY TILLOW: We are all aware, I think, that Medicare is being slowly privatized by the private for-profit Medicare Advantage plans that are growing bigger and bigger and now take up 42 percent of Medicare beneficiaries.
But this is an even more sinister plan, this Direct Contracting Entities, because it is the way that they have to get the people who have chosen traditional Medicare. The ones who didn’t listen to the Joe Namath ads, the people who stayed with traditional public Medicare and this program of direct contracting aligns them and puts them in without their consent into these direct contractors, where they will then be subjected to the whims of these, all of which are for profit-entities. They are hedge funds, venture capitalists. They are physician practices that are owned by private equity. They’re insurance companies like Humana. And people are aligned and put into them based upon their primary care physician. And if you go to a doctor who is in a direct contracting entity, you’re in one.
And the key thing that is happening is it changes the way your care is paid for so that instead of fee for service, your care is paid for on a capitated basis. That means that it changes the incentive from giving you more care to a higher profit when you are given less care.
And that’s basically what’s happening now. There are 53 of these entities that are in a model plan that is underway, and it’s I think, planned for six years. The really sinister thing is that if CMS (Centers for Medicare and Medicaid Services), which is Medicare administration, decides that they want to expand it to all of Medicare, to everybody, they can do so without congressional approval.
So that’s a little complicated, but it is basically private, for-profit entities taking over people who are in traditional Medicare. So basically, unless we stop it, it’s going to destroy Medicare for all of us as a public program.
SCOTT HARRIS: Kay, I wanted to ask you what’s been the response of the Biden administration and congressional Democrats to opposition to this direct contracting model that’s being experimented on in, as you said, 38 states?
KAY TILLOW: Well, you know, most people don’t know about it. So, there hasn’t been an outcry, which I think there will be. I think as people learn about it, there will be an uproar, which is good because that’s the hope that we can stop it. But they haven’t said anything.
There was a letter written by four congresspersons. They were Reps. Katie Porter, Mark Pocan (Wisconsin), Bill Pascrell (New Jersey) and Lloyd Doggett from Texas and those four people wrote a letter to the head of Health and Human Services Xavier Becerra and said the things I’ve been saying. They’re concerned about the direct contracting that puts seniors into this without their consent and it subjects them to Medicare Advantage-like plans that won’t look out for their health care and quality will go down.
And, you know, Medicare Advantage is bilking the government out of billions of dollars and we want it stopped. We want to freeze the program.
And so when I listened to a webinar in September, which was several months after they had written a letter, they still didn’t get an answer from Becerra. So it’s like, you know, the Congress says, “Hey, stop this, this is terrible” and there’s silence from the head of Health and Human Services. So, that’s one reason why people are now trying to call their congresspersons. There’s a campaign to petition Becerra. You know, there was a group that went to Washington headed by Physicians for a National Health Program.
They were there Nov. 30, and they took 13,000 petitions in to present to Becerra. They couldn’t get in, and they couldn’t even get anybody to take the petition. So that’s why the battle is on. And, so far as I know, Biden hasn’t made a statement about it at all.
I mean, there hasn’t been any real congressional concern expressed for what could really undermine what I think is our best public health care program. Because Medicare, you know, did work to cover everybody, at least everybody over 65 and you know, to provide care. There’s a choice of physician, you know, unlike the privatized plans where the network is narrow, you can’t go to this hospital, you can’t go to that doctor, all of those things that are put in the path of people really being able to get care.
For more information, visit Kentuckians for Single-Payer Health Care at kyhealthcare.org.
