top of page


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

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

(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."

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."

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0).

Feel free to republish and share widely.

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.


2021-1130-CD Medicare Privatization DCE
Download PDF • 171KB

310 views0 comments

Recent Posts

See All


PSARA Legislative Conference Tuesday, November 30, 2021 at 1:00 p.m. At our annual Legislative Conference we introduce PSARA's Legislative Agenda for the coming year, get a briefing from our lobbyist,

bottom of page