Biden Continues Trump-Era Ploy to Privatize Medicare

A group of physicians is warning about the entry of Wall Street investors and other profit-seekers via an experiment known as “direct contracting.” 

Health and Human Services Secretary Xavier Becerra in 2016. House Speaker Nancy Pelosi at left. (House Democrats, Flickr, CC BY-NC-SA 2.0)

By Jake Johnson
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.

On Tuesday, a group of physicians from around the nation traveled to Washington, D.C., intending to demand that the Health and Human Services Department immediately stop the Medicare experiment, which is known as direct contracting.

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

Advocates have been publicly sounding the alarm about the 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.

Congress ‘Asleep at the Switch’

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 direct contracting 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.”

Department of Health & Human Services, Washington, D.C. (Sarah Stierch, CC BY 4.0, Wikimedia Commons)

The direct contracting 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 executivesWall Street bankers and right-wing policy consultants notorious for gashing public health programs.

Under the direct contracting 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 took part in Tuesday’s attempt to deliver the petition, 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.”

Sept 24, 2014: PNHP members at the People’s Climate March in New York. (Joe Brusky, Flickr, CC BY-NC 2.0)

The direct contracting 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 direct contracting 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 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.), Katie Porter (D-California) 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, lack 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 direct contracting 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.”

This article is from Common Dreams.

24 comments for “Biden Continues Trump-Era Ploy to Privatize Medicare

  1. Denis Gould
    December 4, 2021 at 11:48

    Anything contracted out sadly leaves us all subjected to inferior effort, work, and results. Don’t privatize Medicaid, it will prove to be a killer for the who need it most!i

  2. Peter B Bowen
    December 4, 2021 at 09:32

    How can an individual opt-out? Is that even possible?

  3. JBAshburn
    December 3, 2021 at 14:08

    What this article brushes over is that Medicare Advantage is also privatization, which makes billions for private healthcare insurers. The DCEs (which this article accurately covers) and Advantage is the one-two punch to eliminate Medicare. 40% of those on Medicare have been lured into Advantage, which, while offering little bells and whistles, includes large co-pays, while decreasing access to out-of-network hospital and special care. It is basically a big HMO, financed by Medicare, but the money and lots of it goes to insurers. Just one example: In real or “tradition” Medicare 97% of funds go to health care providers, and the rest to administrative costs. Advantage is 85%. But with Advantage, insurers receive not only money for health treatment, but based upon the diagnosed conditions of those subscribed to their plans. It is a giant rip-off, with massive fraud already documented.

    Should anyone wonder why millions are being spent ( by your Medicare funds) to get people into Advantage during this open enrollment period?

  4. Hide Behind
    December 2, 2021 at 16:25

    Who we kidding, Medicare has since great generations began whining for more, been a Private and Corporate pork barrel.
    When medical and pharmacy cut back saying they lost mo ey gov upped it’s payouts, Regan upped tax as did Bill Clinton and while still cutting certain benefits.
    Friends on Medicare got real scoop when Dr for major corporate, he is more financial doc than medical, when people complained of cost of drugs on co pay showed them true cost charged by pharmas to Medicare.
    His family works for Large pharmas and he gave true cost of medicine to produce, hospital markups, and cost of private care givers per hour billings. One womans beds cost monthly were $60 c o pay but Medicare billings from corporate and private hospitals a in New programs charged $1300.
    SS and Medicare is a tax for and Run by financial interest and has become a pork barrel not in peoples interest.
    Some one(s) deliberately draining Medicare and Medicade — SS funds and those who think that in US a so called no cost health program run by government wold not be corrupt need institutional help.
    Corruption is rampant in every gov program, if misleading public so corporate and yes politico and bureaucrats can feed others including so called Military Defense is not corrupt.
    It is not illegal theft we need so much worry over it is how gov madebonce illegal into legal theft.

  5. Diana
    December 2, 2021 at 03:18

    Recent polls have shown that 69% of Americans are in favor of a Medicare for All/single payer system run by the government. To no avail, apparently, as we are bombarded with ads for Medicare Advantage plans promising “more” for the hard earned money we have paid into Medicare. It reminds me of the schemes that conmen use to appeal to the “grifter” in their marks. The sheer volume of this advertising tells me that we are experiencing an all-out push to privatize Medicare.

    • robert e williamson jr
      December 3, 2021 at 12:23

      Maybe a possible solution to this crisis is to call on that 69 % to realize that unless they band together and call for a third party all will be lost.

      This last election proves that those no occupying the hall of government in the U.S. are not up to the task.

      And to Mr. James Simpson I posit this. It is possible that individuals like you and I are heading in the same direction, on a bus heading toward solutions. While our destinations may not be the same we are heading in the same direction and realize that keeping the bus moving is of utmost importance.

      Thanks and credit to Beau of the Fifth Column for his bus analogy

      Time to organize a viable third party Mr. Simpson and some compromise will surely be necessary!

      • Lois Gagnon
        December 3, 2021 at 13:07

        The Green Party accepts no corporate campaign funding. Why do you think the Dems are working so hard to kill it? Any third party you organize that doesn’t go along with the corporate campaign finance system will meet the same fate. Why not build on what already exists?

        The Green Party supports Single Payer. We need to get Greens elected to state legislatures and pass single payer at the state level. It won’t happen at the national level until we do.

        • robert e williamson jr
          December 3, 2021 at 21:52

          FYI I hit the link “much of the pilot program” , found just before “Congress Asleep At the Switch”.

          ???? At the top, in the blue area, Geographic Direct Contracting Model: The Direct Contracting Model is currently under review and will no longer begin January 1, 2022. CMS. Looks forward to sharing additional information when available. ?????

          Thank you for the heads up I will contact my senator in the AM.

          I suspect they and we will still be finding the residual feces Trump threw on the wall two years from now.

          This plan needs to be euthanized, ASAP!

          If the dog damned government spent as much money running a program as they do fighting of the implementation of the plan the taxpayer would come out ahead. Never mind funding the running these lobby driven experiments dressed in ” A Government Service to Americans” clothing.

          Good Grief are you serious.

          Thanks CN

  6. Realist
    December 2, 2021 at 01:12

    Somebody ask Biden at his next press conference why he did not just run on the Republican platform in the last election? Ask him why policies he condemns and disavows as “garbage” one day he embraces as the path to truth, justice and prosperity the next?

    I know all politicians furtively play the “bait and switch” game in the popularity contests called “elections,” but this administration displays what can only be characterised as total disrespect and disdain for the electorate. The governance of this country has evolved into a complete farce. The real powers entrenched deep within the bowels of the sovereign state might just as well apprise the public what corporate interests and which corporate leaders will be made formal national policy whenever it suits their purposes. The net result will not result in an iota of a difference.

    • James Simpson
      December 2, 2021 at 03:26

      “Somebody ask Biden at his next press conference why he did not just run on the Republican platform”. Hang on, you’re telling us that the candidate that Noam Chomsky and Bernie Sanders enthusiastically demanded that everyone on the Left must vote for in 2020 was not actually on the Left at all. And that the many comments I wrote stressing this point, for which I received considerable abuse from the “lesser of two evils” advocates might have been correct. Perish the thought. Seriously, even a cursory glance over Biden’s long political career shows that bait-and-switch with the Left has been his primary modus operandi. Yet still they believe his lies. Biden lies as much as Trump; it’s because he is smoother, capital-supporting while ostensibly a Democrat that prevents the media from publishing a running count of those lies.

      • robert e williamson jr
        December 2, 2021 at 12:15

        That’s right James blame this all on someone else other than insane republicans who could not figure a way to run someone other than Trump.

        Almost anyone would have been better than Trump other than a Zionist Democrat. The democrats blew what hopefully is their last chance to help republicans screw this country to death!

        Now take a deep breath and repeat after me, There are no saviors of the country in either the democratic or the republican party. If you actually believe that then we are or might be making some progress.

        By way the idea was to stop the fascist from steam rolling the country into civil war.

        Thanks CN

        • Observator
          December 3, 2021 at 13:34

          I am reminded of the words of Thomas Strother, an African American private in the 1st USCT in the Civil War, who, reflecting on the horrific violence of that struggle, said, “To suppose that slavery, the accursed thing, could be abolished peacefully, and laid aside innocently, after having plundered cradles, separated husbands and wives, parents and children; and after having starved to death, worked to death, whipped to death, ran to death, burned to death, lied to death, kicked and cuffed to death . . . would be the greatest ignorance under the sun.”

          Just substitute “imperialism” for “slavery” in his powerful message, It too will not go quietly, or reasonably, or peacefully, not after feasting unchecked on humanity for so long. We are an aggressive primate species. We are not known for settling our power struggles nonviolently.

          Lincoln famously observed that the country had reached a jumping off place, where it could no longer go on pretending it was worth preserving as half of one thing and half of another. Strother’s generation went through hell on earth to redefine liberty, rather than acquiesce to tyranny. We can only hope to acquit ourselves as well in the times that are coming as surely as night follows day.

  7. C M Concepcion
    December 2, 2021 at 01:06

    The fact that the premium and deductible are skyrocketing for next year is a good indication of the privatisation of Medicare. That pretty much wipes out the Social Security COLA, which was only 5.9 percent, yet the costs for Medicare is going up more than 17 percent. It’s a three-card monty game the corporations are playing, and it’s the people who rely on Medicare that are going to lose out until they’re lost everything it’s already happened with much of Medicaid, where companies like Aetna and Humana are running Medicaid programmes while providing fewer services and increasingly worse care for the most vulnerable of people. Most won’t realise it until it’s too late. Just wait until they start coming after Social Security and privatising it on the stock market.

  8. Maria Sause
    December 1, 2021 at 23:14

    I am shocked to learn about the effort to privatize Medicare, and that President Biden is not acting to stop it. When and where will the rich stop sucking the blood of the people?

    • James Simpson
      December 2, 2021 at 03:28

      When and where? In the USA when then people understand what has been done to them and rise up to take power for themselves; that’s called ‘socialist revolution’.

  9. robert e williamson jr
    December 1, 2021 at 22:41

    If you are one of these people who still believe either political party is in business in order to directly benefit you who voted for them through their representation of your best interest think again.

    I swear to Dog all of them the dimocraps and repugna ( as in repugnant) licans seem to be spoiling for a revolution of some sort!

    Just where the hell does Barak Obama weigh in on this latest stunt to drive the masses to total distraction? In fact where are those who voted for his health care program? They go all in for this and the entire bunch have proven themselves again as being nothing more that common high dollar grifters.

    These lawmakers are not in any sense of reality asleep at the switch here, playing possum maybe but asleep. Hell no! They are on the dole or being threatened by those who will benefit most from this latest example of our government failing us. These elected parasites are counting their money!

    Think not, the dimos are still inventing ways to lose clout with voters and the repugnalicans, well see repugnant as defined in the predicative, that is, in conflict with, incompatible with, in this case the laws of the land plying nothing but stubborn resistance to the governing process.

    Thanks CN

  10. Maxine Chiu
    December 1, 2021 at 20:18

    Are Biden and Trump really that different?….Think Julian Assange, immigrant cages on the border, Guantanamo and much else.

    • robert e williamson jr
      December 2, 2021 at 09:54

      Sure they are. Trump has been screwing the little guy since his inheritance of billions most of his life from the private sector.

      Biden, working on obtaining the same tainted wealth and power has been doing the same thing during his life long employment working for the U.S. federal government.

      Then there is their individual natural intelligence! Mmmm! You know Maxine you may have a very valid point here.

  11. Nick Shimmin
    December 1, 2021 at 17:52

    exactly what Tony Blair did with the NHS under the guise of extra funding, and the media completely ignored it. and we see the results on the UK right now

  12. David Otness
    December 1, 2021 at 16:02

    Sigh… Elizabeth Fowler. She essentially wrote the final version of Obama Care after rotating in from WellPoint to be Dem Sen Finance Chair Max Baucus’s chief aide on healthcare. This is bad news.


  13. December 1, 2021 at 15:15

    If you keep voting for the duopoly, you only have yourself to blame.

    • James Simpson
      December 2, 2021 at 03:30

      Lesser of two evils… voting for a third party is a vote for Trump… blah blah blah (Copyright Noam Chomsky & Bernie Sanders).

      • Rob
        December 2, 2021 at 18:03

        In a two party system, which is what we have in the US, voting for third party candidates who have ZERO chance of winning is tantamount to voting for the greater of two evils. I wish it weren’t so, but simple logic says that it is. Deal with it, or drop out of political participation altogether, and accept whatever happens.

  14. renate
    December 1, 2021 at 14:50

    Medicare is already too expensive because the for profit industry is involved, what else is all the advertising for PART C Medicare Advantage. So, of all people Biden wants to completely turn it over to the private for profit industry, the very reason why health care is eating up almost 20% of the nations GDP. The government directly and indirectly funds almost half of the medical costs already.
    Mr. Biden’s home state is Delaware,where the insurance industry has the HQ. He also experienced the hurdles put up against ACA, were the taxpayers are paying the subsidies to keep insurance affordable. Insurance premiums and deductibles and co-payments are paid by the consumer first before the insurance company pays a dime.
    Again Democrats are ready to throw their voters under the bus again, as they did with SS, when they together with Reagan started the SSTF ending pay go, when Clinton continued to tear down the LBJ great society and he generously pushed through unpaid maternity leave and COBRA for the unemployed. And we are facing it again with a “CENTRIST” Democrat like Manchin.
    That is why Democrats will lose elections, they are RW Republicans in disguise. Why vote when the corporate elite owns the government.

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