Congress 'Asleep at the Switch' as Biden
Continues Trump-Era Ploy to Privatize Medicare
More than 1,500 physicians warn that the experiment threatens "the future of Medicare as
we know it."
November 30, 2021
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
"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
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."
"Next year, millions more Americans will find themselves in privatized Medicare, and most will never know what happened."
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
"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
(and Biden - KB) 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."
Play Video https://youtu.be/kzwQ7fm7uRE
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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PSARA Signs On to Letter Supporting Lower Drug Prices
The Ability to Negotiate Drug Prices Must be Part of the Build Back Better Bill
October 20 letter:
Dear Leader Schumer and Speaker Pelosi, We write to you with growing concern over reporting that congressional leadership is considering excluding or significantly weakening drug price ne- gotiation policy in the Build Back Better Act, due to pressure from members of Congress out of step with the needs and demands of the American people. Drug price negotiation has repeatedly polled as one of, and often the most popular single policy in the entire Build Back Better Act and Biden agenda. That extraordinary support holds even after voters are presented with talking points from prescription drug corporations opposing price negotiations, including 95% of Democrats and more than 8-in- 10 adults generally.
We recognize that Medicare drug price negotiation has been a long- standing priority for you both, Leader Schumer and Speaker Pelosi. Yet certain isolated members of Congress would rather leave your promises unfulfilled, prioritizing drug corporations’ ongo- ing ability to price gouge and charge United States consumers 3-4 times prices paid in other wealthy countries for prescription drugs over staying true to commitments and helping patients who are struggling to afford medicines. Some have proposed changes that would render drug price negotiations virtually meaningless, by excluding patented drugs from negotiations and removing the excise tax penalty to enforce drug corporation engagement in negotiations. Patented, brand-name drugs account for most of the spending on prescription drugs in Medicare and in the United States overall. Excluding such drugs from negotiations would purposely ignore the medicines for which drug corporation price gouging is most severe, and patients most deeply harmed by price gouging. Without an aggressive enforcement mechanism to compel drug corporations to engage in direct government price negotiations, in effect the policy would no longer be “negotiation” – it would instead be- come a highly structured process for the United States government to beg.
We stand with you to fulfill your longstanding promises to pass drug price negotiation and bold drug pricing reform, and to finally deliver on years of promises to enact one of the most commonsense and popular measures ever demanded of Congress.