PNHP

Members of Congress Demand an End to Medicare Direct Contracting

In a letter to HHS Sec. Becerra, 54 members of Congress call for an end to the controversial Direct Contracting pilot program, which inserts profit-seeking middlemen into Traditional Medicare without seniors’ consent, funneling “taxpayer dollars into profits, not patient care”

For Immediate Release
January 5, 2022
Contact: Clare Fauke, Physicians for a National Health Program, clare@pnhp.org

Physicians for a National Health Program (PNHP), an organization of 24,000 physicians who support publicly financed Medicare for All, today applaud the 54 members of Congress who sent a letter to HHS Sec. Xavier Becerra demanding an end to the controversial Medicare Direct Contracting program. 

The letter, written by Rep. Pramila Jayapal (WA-07), was signed by several prominent members of Congress, including Rep. Rosa DeLauro (CT-03), Chair of the House Appropriations Committee and Chair of the Labor, Health & Human Services, and Education Appropriations Subcommittee; and Rep. John Yarmuth (KY-03), Chairman of the House Budget Committee. 

Direct Contracting is a pilot program launched late in the Trump Administration to change the way that Medicare pays for seniors’ care. Under this program, seniors who actively choose Traditional Medicare are automatically enrolled in third-party “Direct Contracting Entities (DCEs)” without their full knowledge or consent. Medicare then pays DCEs a lump sum to manage beneficiaries’ care, allowing DCEs to keep up to 40% of what they don’t pay for in medical services as profit — a dangerous incentive to ration and restrict care. Once a senior is auto-enrolled into a DCE, their only way out of the program is to change primary care providers. 

In the letter to Sec. Becerra, Rep. Jayapal and colleagues argue that “DCEs pose a threat to patient care and outcomes due to the encroachment of profit-driven organizations on their care,” noting that a majority of the 53 current DCEs are owned and controlled by investors such as private equity firms and large commercial insurers, not physicians. “This model disrupts the sanctity of traditionally public Medicare benefits by giving control of beneficiary care to private interests,” the letter reads.

“The Medicare Direct Contracting program is a threat to the health of seniors and to the future of Medicare itself,” said Dr. Susan Rogers, a retired internal medicine doctor and president of PNHP, noting that because Direct Contracting is a pilot program of the Center for Medicare and Medicaid Innovation, it can be scaled up to all of Medicare without Congressional approval. “If left unchecked, Direct Contracting will hand Traditional Medicare to Wall Street investors, without input from seniors, doctors, or even Congress. We applaud Rep. Jayapal and the 54 members of Congress for taking action to protect Medicare today and for future generations.” 

In late November, Dr. Rogers led a delegation of physicians to deliver a petition to Sec. Becerra, demanding an immediate end to Medicare Direct Contracting. 

Today’s LETTER is signed by: 

Alma Adams (NC-12)
Karen Bass (CA-37)
Donald S. Beyer Jr. (VA-08)
Earl Blumenauer (OR-03)
Suzanne Bonamici (OR-01)
Jamaal Bowman, Ed.D. (NY-16)
Cori Bush (MO-01)
Salud Carbajal (CA-24)
Andre Carson (IN-07)
David Cicilline (RI-01)
Yvette D. Clarke (NY-09)
Steve Cohen (TN-09)
Gerald E. Connolly (VA-11)
Jim Cooper (TN-05)
Jason Crow (CO-06)
Danny K. Davis (IL-07)
Peter A. DeFazio (OR-04)
Rosa L. DeLauro (CT-03)
Mark DeSaulnier (CA-11)
Debbie Dingell (MI-12)
Mike Doyle (PA-18)
Adriano Espaillat (NY-13)
Sylvia R. Garcia (TX-29)
JesĂşs G. “Chuy” GarcĂ­a (IL-04)
RaĂşl M. Grijalva (AZ-03)
Jared Huffman (CA-02)
Pramila Jayapal (WA-7)
Mondaire Jones (NY-17)
John B. Larson (CT-01)
Barbara Lee (CA-13)
Mike Levin (CA-49)
James P. McGovern (MA-02)
Joseph Morelle (NY-25)
Jerrold Nadler (NY-10)
Joe Neguse (CO-02)
Marie Newman (IL-03)
Eleanor Holmes Norton (DC-00)
Alexandria Ocasio-Cortez (NY-14)
Ilhan Omar (MN-05)
Donald M. Payne, Jr. (NJ-10)
Mark Pocan (WI-02)
Katie Porter (CA-45)
Ayanna Pressley (MA-07)
Jamie Raskin (MD-08)
Jan Schakowsky (IL-09)
Robert C. “Bobby” Scott (VA-03)
Mary Gay Scanlon (PA-05)
Mark Takano (CA-41)
Dina Titus (NV-01)
Rashida Tlaib (MI-13)
Bonnie Watson Coleman (NJ-12)
Peter Welch (VT-At Large)
Nikema Williams (GA-05)
John B. Yarmuth (KY-03)

Physicians for a National Health Program (pnhp.org) is a nonprofit research and education organization whose more than 24,000 members support single-payer Medicare for All reform.