PNHP

Is Medicare there for those who need it?

Is Medicare there for those who need it?

Facts about Medicare Advantage plans you never saw in the TV ads

By Mary McDevitt, M.D.
Sonoma County (Calif.) Gazette, January 31, 2023

Annual enrollment is past; if you are a healthy senior and can take advantage of the “free” fitness membership some programs offer, then you will probably be happy with your Medicare Advantage program.

On the other hand, if you are a senior with some health problems, you may not be so happy. Even though you may not pay a monthly premium or pay a very low monthly premium, you will be hit with primary visit co-pays (up to 20% of the doctor’s fee), specialty visit co-pays (up to $30), four levels of co-pays for medications, and Hospital co-pays between $250 and $350 per day for the first four hospital days. There will also be restricted networks of hospitals and doctors, denials of service and, in some cases, denials of payment for a service that would have been paid for under traditional Medicare.

An investigation by the Inspector General of the Department of Health and Human Services in 2019 found repeated examples of care denials that coding experts and independent physician reviewers found were medically necessary. They estimated that 85,000 beneficiary requests for prior medical care authorization were potentially improperly denied in 2019. You may find that a denied whole-body MRI scan may cost you $2,499. However, you may be happy to know that Medicare has placed a limit on what a Medicare Advantage participant must pay “Out-Of-Pocket.” For 2023 this annual in-network limit is $8,300.

Where do the Medicare Advantage programs get their funds? In addition to premiums and co-pays, the Medicare Advantage program is paid by the Medicare Trust Fund about $1200 per month to “manage” and “provide” your care. Where does the Medicare Trust Fund get this money? It is funded by a payroll tax you pay every two weeks during your career.

Recognizing that some members in any Advantage program may be sicker than others, Medicare instituted a “Risk Adjustment” system based on multiple diagnoses in 2000. Since then, a whole industry has emerged to scan medical records, hire nurses for home visits and develop specific software programs; all to identify additional diagnoses to enhance payment.

Medicare has also implemented quality bonuses and a “Star” system to provide more money to the Medicare Advantage programs. This “Risk Adjustment” system has been fraught with documented fraud and abuse. In a federal audit in 2021, Humana was found to have overcharged Medicare $200 million. As noted in a recent NYT article, four of the five most prominent players in the Medicare Advantage business (UnitedHealth, Humana, Kaiser and Elevance) have faced federal lawsuits alleging that efforts to overdiagnose patients have crossed the line into fraud. The Federal Medicare Payment Advisory Commission’s 2022 report to Congress found that at least $12 billion in over-payments were made to Medicare Advantage plans in 2020 alone.

If you are upset by this abuse of your Medicare tax dollars, I suggest you call the U.S. Capital switchboard at 202-224-3121 to speak to or leave a message for either of our Senators and your Representative to voice your concern.

So, during your first year in your new Medicare Advantage program, you be the judge of actual cost and value to you. If it does not meet your medical needs, or your financial situation, know that during this first year, you can switch to traditional Medicare with supplemental insurance (Medi Gap) without penalty. You cannot be denied supplemental insurance, and there will be no underwriting.

Dr. Mary McDevitt is chair of the Sonoma/Napa chapter of Physicians for a National Health Program.

https://www.sonomacountygazette.com…

Pervasive Greed Destroying US Health Care

Summary: Esteemed medical care quality leader Donald Berwick condemns the pervasive and crippling role of financial gain-seeking in US health care. As he said recently, single payer is the solution.

Salve Lucrum: The Existential Threat of greed in US Health Care, JAMA, January 30, 2023, by Donald M. Berwick

The grip of financial self-interest in US health care is becoming a stranglehold, with dangerous and pervasive consequences. No sector of US health care is immune from the immoderate pursuit of profit, neither drug companies, nor insurers, nor hospitals, nor investors, nor physician practices.

Rapidly increasing pharmaceutical costs are now familiar to the public. Eye-popping prices for new, essential biological and biosimilar drugs, enabled by the failure of any serious drug price regulation, have yielded enormous profits for drug companies even though much of the basic biological research funding has come from governmental sources.

Particularly costly has been profiteering among insurance companies participating in the Medicare Advantage (MA) program. By gaming Medicare risk codes and the ways in which comparative “benchmarks” are set for expected costs, MA plans have become by far the most profitable branches of large insurance companies. According to some health services research, MA will cost Medicare over $600 billion more in the next 8 years than would have been the case if the same enrollees had remained in traditional Medicare.

Hospital pricing games are also widespread. Hospitals claim large operating losses, especially in the COVID pandemic period, but large systems sit on balance sheets with tens of billions of dollars in the bank or invested. Hospital prices for the top 37 infused cancer drugs averaged 86.2% higher per unit than in physician offices.

Recent New York Times investigations have reported on nonprofit hospitals’ reducing and closing services in poor areas while opening new ones in wealthy suburbs and on their use of collection agencies for pursuing payment from patients with low income.

Windfall profits also appear in salaries and benefits for many health care executives.

Avarice is manifest in mergers leading to market concentration, which, despite pleas of “economies of scale,” almost always raise costs. That is what is happening as hospital consolidations proceed largely unchecked in many urban markets and as physician practices are purchased by for-profit firms. Mergers, acquisitions, and public offerings have been occurring throughout health care, often at valuations that defy logic.

Profit may have its place in motivating innovation and higher quality in health care, as in any industry. But kleptocapitalist behaviors that raise prices, salaries, market power, and government payment to extreme levels hurt patients and families, vulnerable institutions, governmental programs, small and large businesses, and workforce morale. Those behaviors, mostly legal but nonetheless wrong, have now accumulated to a level that poses an existential threat to a sustainable, equitable, and compassionate health care system.

What to do about greed? No answer is easy, not least because of the political lobbying might of individuals and organizations that are thriving under the current laxity. The cycle is vicious: unchecked greed concentrates wealth, wealth concentrates political power, and political power blocks constraints on greed.

Health care professionals in all disciplines need to become noisier about the conflict between unchecked greed and the duty to heal.

The glorification of profit, salve lucrum, is harming both care and health. Health care should not be an engine for excessive private gain.

Comment:

By Don McCanne, M.D.

Considering that we have by far the most expensive heath care system in the world, yet one with mediocre outcomes by international standards and one that shamefully leaves so many without coverage and a great many more with unacceptable exposure to financial hardship, we should certainly take a serious look at the role of greed in producing this despicable performance. If we would simply eliminate the impact of greed and apply the proceeds to the operation of a well-crafted, universal, equitable, health care financing system – a single payer system – we would have a system that would be the envy of all nations.

What an idea. Having so much good come out of the elimination of an evil such as greed. How could anyone not join that bandwagon, except maybe for the greedy, who we can certainly do without.

Single payer… not only health care for all, but finally unifying the people to end the greed that has been permeating health care.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Hospital Expenditures Under Global Budgeting and Single-Payer Financing: An Economic Analysis, 2021-2030

By Adam W. Gaffney, M.D., M.P.H.; David U. Himmelstein, M.D.; Steffie Woolhandler, M.D, M.P.H.; and James G. Kahn, M.D., M.P.H.
International Journal of Social Determinants of Health and Health Services, January 30, 2023

Abstract

U.S. hospitals provide large amounts of low-value care and devote inordinate resources to administration, while some hospitals leverage market power to realize large profits. Meanwhile, many rural and safety net hospitals are financially distressed. The coexistence of waste and want suggests that U.S. hospital financing is neither efficient nor equitable. We model the economic consequences of adopting the mode of hospital payment used in Canada and the U.S. Veterans Health Administration and proposed in the leading congressional single-payer Medicare-for-All bill: global budgeting. Our models assume increased utilization due to expanded and upgraded coverage; gradual reductions in administrative costs from simplified payment; and the elimination of hospital profits, with hospital capital expenditures funded by explicit grants rather than from profits or borrowing. We estimate that non-federal hospital operating budgets will total $17.2 trillion between 2021 and 2030 under current law versus $14.7 trillion under single-payer with global budgeting. This difference reflects $520 billion in foregone profits and $1,984 billion in reduced expenditures on hospital administration; expenditures on clinical operating budgets, however, would be higher than under current law, funded out of profits.

full study:
https://journals.sagepub.com…

Single Payer Savings for Households: Calculator Results

Summary: Four thousand individuals reporting current healthcare spending and income reveal that … nearly 9 in 10 will save money, more than $5000 per year on average, with single payer.

At a time of inflation, California should take a bold step to tame rising health care costs, Viewpoints, Sacramento Bee, January 11, 2023, by James G. Kahn and Michael Lighty

The word of the year for 2022 could have been “inflation.” Air travel prices rose nearly 40% from a year earlier. Grocery, housing, energy and other prices are also up. And once again, the cost of health care, which makes up nearly a fifth of our economy, is rising sharply.

Most health insurers in the individual market are expecting premium increases between 5% and 14% this year, according to Axios, and family out-of-pocket health care costs have jumped 10%.

But health care is different from other elements of the consumer price index. There is a way to control health care inflation while providing everyone with high-quality coverage.

Universal public financing of health care — often called single-payer coverage or “Medicare for all” — can cure what ails us both medically and financially.

Single-payer coverage would control health care inflation by eliminating the excessive profits and charges, outrageous drug prices and bureaucratic waste inherent in our current system of private health insurance.

Want proof? We have it.

The single-payer advocacy coalition Healthy California Now and the National Union of Healthcare Workers recently developed a household health care cost calculator for use by individuals and families who live in California. It’s designed to compare the costs associated with a single-payer program to current health care expenses.

So far, 4,000 households have tried it. Users enter their premium payments for the prior year, employer premium contributions, out-of-pocket expenses and annual income. The calculator then compares their costs under the current system to projected single-payer taxes at their income level.

Eighty-seven percent of those who used the calculator found average annual savings of more than $6,000 per household. Medicare beneficiaries were more likely to achieve net savings at a slightly lower average, $5,150 per household. The 13% of households that wouldn’t enjoy net savings generally had very low current premium and out-of-pocket expenses due to extremely generous health plans or annual incomes exceeding $350,000.

Take five minutes and try this exercise for yourself at Healthy California Now’s website. …

Our leaders in Sacramento … have the power to make single-payer a reality for the state.

The Healthy California for All Commission, formed by Gov. Gavin Newsom and the Legislature last year, defined a “unified financing” plan offering universal coverage and comprehensive benefits for everyone. Under this plan, out-of-pocket costs and cost-sharing would be eliminated. Rather than payments to private insurers, the funding would come from a progressive tax that can easily generate the necessary funds.

The tax plan used in the calculator includes a 2% sales tax on nonessential items plus a payroll tax that starts at incomes of at least $75,000 and a personal income tax that starts at $300,000 a year. Additional taxes would be levied on the state’s wealthiest individuals and corporate profits.

It’s true that some well-paid professionals would be at risk of paying more for single-payer coverage, and the super-wealthy would have to share some of the burden. But in exchange, all Californians would get a system that guarantees excellent coverage, including for long-term care, and a health plan that efficiently and equitably covers health care costs for everyone.

We can fight health care inflation while providing quality care for all, and California can show the way. The words on everyone’s lips this year should be “Medicare for all.”

Comment:

By Jim Kahn, M.D., M.P.H.

Developing and deploying this online cost calculator was very gratifying. We knew from past research that single payer saves money for the health system (see here). We also knew that funding single payer – collecting the revenue needed to cover all costs via the public budget – could be done with progressive taxes, i.e., a heavier burden on the rich.

What we didn’t know was how diverse households would fare. That is, how savings (ending current premiums and out-of-pocket costs) would compare with new taxes based on income. So we decided to ask. To estimate taxes, we designed a progressive mix of sales, payroll, income, wealth, and corporate profit taxes that yield the $223 billion needed in California for a no cost-sharing version of single payer (per the Health California for All Commission).

We found that nearly 9 out of 10 individuals who used the calculator would save money with single payer. That is, new taxes would be less than current spending on premiums (including wage effects of the employer portion) and out-of-pocket such as deductibles, copays, and uncovered services. The average savings are more than $5000 per year.

This is very encouraging in terms of public support for single payer. It’s not the last word on the topic – out-of-pocket burden is rising, so savings may grow over time, and different tax proposals will alter the exact numbers.

Still, the fundamental message is powerful: a progressively financed single payer proposal will financially benefit the vast majority of households. And (need I say?) do so while providing access to care with any provider.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Collector Rolex vs. Progressive Taxes to Foster Egalitarian & Cohesive Society

Summary: $18 million for a pre-owned Rolex watch vs. tax rates that redress our astounding, historically high economic inequality, in pursuit of social cohesion and equality. Which message do we believe in?

Rolex Now Has a Resale Program. The Watch World Quakes. New York Times, January 18, 2023, by Victoria Gomelsky

There is a saying in the high-end watch trade that there are only two kinds of watchmakers: Rolex and everyone else.

Rolex is an even bigger juggernaut in secondary channels, where its pre-owned watches often fetch twice their retail value, and sometimes far more. (Many watch insiders cite the 2017 auction of Paul Newman’s Rolex Daytona for $17.8 million as the start of the current mania for collectible timepieces.)

Joseph Stieglitz: tax high earners at 70% to tackle widening inequality, The Guardian, January 22, 2023, by Rupert Neate

Joseph Stiglitz, the Nobel prize-winning Keynesian economist, has called for … a special worldwide income tax rate of 70% on the highest earners …

“People at the top might work a little bit less if you tax them more. But on the other hand, our society gains in having a more egalitarian, cohesive society,” the former World Bank chief economist, 79, told Oxfam’s Equals podcast.

Stiglitz said that while an increase in the top rate on income would help lead to a more equal society, introducing wealth taxes on the fortunes accumulated by the world’s wealthiest over many generations would have an even bigger impact.

He described proposals by the US senator Elizabeth Warren for a 2% tax on people with assets of more than $50m and 3% on those with more than $1bn as “very reasonable” and said they “would really go a long way to raising revenues that could alleviate some of our country’s problems”.

Research published by Oxfam last week showed almost two-thirds of the new wealth amassed since the start of the pandemic has gone to the richest 1%. The charity found the best-off had pocketed $26tn (£21tn) in new wealth up to the end of 2021. That represented 63% of the total new wealth, with the rest going to the remaining 99% of people.

Oxfam said for the first time in a quarter of a century the rise in extreme wealth was being accompanied by an increase in extreme poverty. [See also: Oxfam 5 ways billionaires are bad for the economy]

More than 200 members of the super-rich elite last week called on governments around the world to “tax us, the ultra rich, now” to help address the inequality crisis.

The group of 205 millionaires and billionaires called on world leaders and business executives meeting in Davos for the World Economic Forum to urgently introduce wealth taxes to help tackle “extreme inequality.”

Comment:

By Don McCanne, M.D.

Let’s see now. Would we rather have a society in which a privileged few could accumulate much of the monetary work product of the rest of us in order to be able to satisfy personal whims such as being able to pay $17.8 million for a used wristwatch? Or would we rather have an egalitarian society in which people are rewarded appropriately for their work while being assured that their basic needs, such as health care, would be automatically met without having to face financial hardship? (As a reminder, post-WWII, a period of rapid economic growth, the US taxed top income brackets at 90%. High taxes and rising prosperity are mutually compatible.)

No contest: egalitarian values. So let’s get on with it. We all already have access to the time of day; let’s now achieve access to comprehensive health care for everyone in a system that’s affordable for all: single payer!

Editor: Preview of related forthcoming HJM post: Our online cost calculator finds that single payer financed via taxes focused on higher earners, the wealthiest, and corporate profits lowers healthcare spending for 9 out of 10 households.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Dr. Phil Verhoef on “The Rick Smith Show”

PNHP president Dr. Phil Verhoef appeared on “The Rick Smith Show” on January 27, 2023. Dr. Verhoef warned viewers about the rapid privatization of Medicare—started in earnest under the Medicare Advantage program and continuing under the recently launched ACO REACH program.

Commercial insurance companies and other for-profit entities are “looking at REACH as an opportunity to make money,” he said. “The only way you make money as an insurance company is by not covering care.”

How Not to do Universal Coverage

Summary: An appealing-sounding proposal for universal health insurance envisions a “social floor” “basic bundle” of medical care, to be supplemented by those that can afford more. It thus needlessly sacrifices the efficiency, equity, and unity available with single payer.

Achieving Universal Health Insurance Coverage In The United States: Addressing Market Failures Or Providing A Social Floor?, National Bureau Of Economic Research, January 2023, by Katherine Baicker, Amitabh Chandra, Mark Shepard

Abstract:

The United States spends substantially more on health care than most developed countries, yet leaves a greater share of the population uninsured. We suggest that incremental insurance expansions focused on addressing market failures will propagate inefficiencies and are not likely to facilitate active policy decisions that align with societal coverage goals. By instead defining a basic bundle of services that is publicly financed for all, while allowing individuals to purchase additional coverage, policymakers could both expand coverage and maintain incentives for innovation, fostering universal access to innovative care in an affordable system.

Approaches grounded in addressing market failures in the current system are perhaps the path of least resistance in the short run, minimizing disruptions to care while marginally increasing coverage. But it’s worth noting both the limited effectiveness of such approaches over the last 50 years and the shortcomings that such patches would perpetuate.

Rather than beginning with the presumption that the main need is addressing market failures, an alternative approach to expanding coverage begins with the explicit presumption that covering everyone with some form of insurance is a social goal.

We discuss three key policy decisions in a system of guaranteed universal basic coverage: 1) What health care does the basic bundle cover, and how generous is that coverage? 2) What mechanisms are used to limit spending, and who decides? 3) Are people permitted to purchase top-up or supplementary coverage beyond the basic bundle? One goal of this article is to provide a framework that may help guide future research to help inform answers to these questions.

Few would argue that the current US health care system is serving everyone well. We are surely spending too much on the provision of health care that is delivering too little benefit to too few people. Reconceptualizing what we mean by universal coverage to ensure that public resources are devoted to care with high health benefit offers the opportunity to ensure universal access to innovative care in an affordable system.

Comment:

By Don McCanne, M.D. and Jim Kahn, M.D., M.P.H.

Off hand, it seems that the question addressed by this paper has an obvious answer.  We have been attempting to expand health insurance coverage for everyone by addressing market failures, and it has, in itself, been a failure. Providing a social floor in health care coverage for everyone should lead to just the results we have been seeking. So where have these academics missed the target in describing the much needed pathway to health care justice for all?

Their first step in recommending abandoning those approaches that have led to market failures is certainly correct. Then establishing a social floor for coverage for everyone is also correct. That basically is what the PNHP single payer proposal is. The problem is that they define the social floor as covering the “basic bundle” for everyone,  and, then, “Once the parameters of a basic, guaranteed plan are established, a policy decision needs to be made about the allowability of supplemental plans for private purchase.” There could be a wide variety of benefits that could be “topped up” including patient cost sharing, add-on services such as dental or vision, private providers beyond those in narrow networks included in the basic bundle, or other important products or services considered to be beyond basic. That is, the basic bundle should not have to be topped up to reach the level of routine health care.

The idea of a “basic bundle” fails. First, how do you decide what to exclude? Is dental care really optional? Are narrow networks satisfactory for those who need a specialist? Second, how do you administer it efficiently? The authors propose capitation or ACOs to control spending. These have a dismal track record, and using for-profit intermediaries (as in Medicare Advantage) substantially increases overall costs while reducing care.

It’s not only inefficient, it’s inequitable. Topping up would allow wealthier individuals to receive the higher level of care to which everyone should be entitled. Instead of receiving greater benefits, they should be receiving the same comprehensive benefits as everyone else, but they should be paying a higher amount through progressive taxes. The extra funds that the wealthy put into the health care system should not be paying for privilege, but they should be funding an egalitarian health care system instead.

We’d all benefit together. Single payer bringing us together. An antidote for current political divisiveness.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Access to health care should be expanded, not restricted

By Henry Kahn, M.D.
The Atlanta Journal-Constitution, January 23, 2023

Commissioner Caylee Noggle has alerted us to the “huge undertaking” faced by her Georgia Department of Community Health in the months ahead. Her staff must examine the circumstances of 2.7 million Medicaid enrollees to drop those who no longer qualify under the restrictive rules of our state’s program.

We can help Commissioner Noggle. Let’s take a load off her staff by expanding Medicaid to every Georgian who otherwise cannot access health care. We won’t need to review millions of case files or expel anyone from the program. Expanding Medicaid will also reduce stress on Georgia medical facilities that risk closure because of uncompensated care.

Better yet, we should enact universal, single-payer health coverage for everyone from the cradle to the grave: Expanded, improved Medicare For All. Such a plan will improve our health and save money by reducing our current system’s bureaucratic complexity and overhead expenses.

https://www.ajc.com…

Galluping In the Wrong Direction: Higher Cost Barriers & Lower Quality

Summary: National polls show that the US is losing ground on two major indicators of health system performance: access to care and perceived quality. Who thought it could get worse? Gallup shows we’re galloping to disaster.

Record High in U.S. Put Off Medical Care Due to Cost in 2022, Gallup, January 17, 2023, by Megan Brenan

The percentage of Americans reporting they or a family member postponed medical treatment in 2022 due to cost rose 12 points in one year, to 38%, the highest in Gallup’s 22-year trend.

Americans were more than twice as likely to report the delayed treatment in their family was for a serious rather than a nonserious condition in 2022. In all, 27% said the treatment was for a “very” or “somewhat” serious condition or illness, while 11% said it was “not very” or “not at all” serious. [This] 16-point gap in the perceived seriousness of forgone treatment in 2022 is the second largest on record …

Americans Sour on U.S. Healthcare Quality, Gallup, January 19, 2023, by Lydia Saad

For the first time in Gallup’s two-decade trend, less than half of Americans are complimentary about the quality of U.S. healthcare, with 48% rating it “excellent” or “good.” The slight majority now rate healthcare quality as subpar, including 31% saying it is “only fair” and 21% — a new high — calling it “poor.”

Americans’ evaluations of the quality of healthcare they personally receive are also at a low ebb — albeit higher than their U.S. rating — with 72% giving it excellent or good marks. This low reading has been two years in the making, with the metric falling six points to 76% in 2021 and another four points in the past year.

Comment:

By Jim Kahn, M.D., M.P.H.

This pair of national Gallup polls demonstrates our health care is headed in the wrong direction. The care is less affordable and lower quality.

Why less affordable? In brief, under-insurance. As the Kaiser Family Foundation showed in its 2022 annual survey of job-based insurance, deductibles continue increasing (Fig. 7.18), even as employee premium contributions rise or stay flat (Fig. 6.23). Drug prices are extraordinarily high due to the industry’s relentless pursuit of profit, and cost controls in the Inflation Reduction Act are anemic. A commentary from last week noted that drug cost-sharing under the now ubiquitous pharmacy benefit managers (PBMs) can be devastating for patients who depend on expensive brand-name medicines with no generic options. Two main causes: First, a shift from fixed co-payments to percentage-of-cost coinsurance, which is based on inflated list prices. Second, exclusion of manufacturer patient assistance from deductible credit. The difference for patients can be tens of thousands of dollars a year (see sample calculations here). Wendell Potter wrote recently on the painful results for patients.

Financial barriers have clinical consequences. Research by Gaffney et al in late 2022 found rationing of insulin by 17% of patients or 1.3 million US adults. Research by Chandra et al in 2021 found that a 34% ($10) rise in out-of-pocket cost for seniors reduces drug use by 23% and increases mortality by one-third, specifically for statins and antihypertensives.

Why lower quality? It’s multi-factorial. Clearly COVID has burdened health care capacity, leading to worker stress, burnout, and staffing shortages. But I believe patient frustration also carries over from the financial challenges. When people have to pay more – which they can barely afford – they demand and expect more.

When the system is failing in multiple ways, it feels like it’s completely falling apart. Which it is.

Saddle up for single payer.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

‘Cancel This Failed Experiment’: Physicians Tell Biden HHS to End Medicare Privatization Pilot

The program “presents a threat to the integrity of traditional Medicare, and an opportunity for corporations to take money from taxpayers while denying care to beneficiaries,” said Physicians for a National Health Program.

By Jake Johnson
Common Dreams, January 19, 2023

A national physician group this week called for the complete termination of a Medicare privatization scheme that the Biden White House inherited from the Trump administration and later rebranded—while keeping intact its most dangerous components.

Now known as the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model, the experiment inserts a for-profit entity between traditional Medicare beneficiaries and healthcare providers. The federal government pays the ACO REACH middlemen to cover patients’ care while allowing them to pocket a significant chunk of the fee as profit.

The rebranded pilot program, which was launched without congressional approval and is set to run through at least 2026, officially began this month, and progressive healthcare advocates fear the experiment could be allowed to engulf traditional Medicare.

In a Tuesday letter to Health and Human Services Secretary Xavier Becerra and Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure, Physicians for a National Health Program (PNHP) argued that ACO REACH “presents a threat to the integrity of traditional Medicare, and an opportunity for corporations to take money from taxpayers while denying care to beneficiaries.”

The group, which advocates for a single-payer healthcare system, voiced alarm over the Biden administration’s decision to let companies with records of fraud and other abuses take part in the ACO REACH pilot, which automatically assigns traditional Medicare patients to private entities without their consent.

CMS said in a press release Tuesday that “the ACO REACH Model has 132 ACOs with 131,772 healthcare providers and organizations providing care to an estimated 2.1 million beneficiaries” for 2023.

“As we have stated, PNHP believes that the REACH program threatens the integrity of traditional Medicare and should be permanently ended,” Dr. Philip Verhoef, the physician group’s president, wrote in the new letter. “Whether or not one agrees with this statement, we should all be able to agree that companies found to have violated the rules have no place managing the care of our Medicare beneficiaries.”

Among the concerning examples PNHP cited was Clover Health, which has operated so-called Direct Contracting Entities (DCEs)—the name of private middlemen under the Trump-era version of the Medicare pilot—in more than a dozen states, including Arizona, Florida, Georgia, and New York.

PNHP noted that in 2016, CMS fined Clover—a large Medicare Advantage provider—for “using ‘marketing and advertising materials that contained inaccurate statements’ about coverage for out-of-network providers, after a high volume of complaints from patients who were denied coverage by its MA plan. Clover had failed to correct the materials after repeated requests by CMS.”

Humana, another large insurer with its teeth in the Medicare privatization pilot, “improperly collected almost $200 million from Medicare by overstating the sickness of patients,” PNHP observed, citing a recent federal audit.

“It appears that in its selection process [for ACO REACH], CMS did not prevent the inclusion of companies with histories of such behavior,” Verhoef wrote. “Given these findings, we are concerned that CMS is inappropriately allowing these DCEs to continue unimpeded into ACO REACH in 2023.”

While the Medicare pilot garnered little attention from lawmakers when the Trump administration first launched it during its final months in power, progressive members of Congress have recently ramped up scrutiny of the program.

Last month, Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) led a group of lawmakers in warning that ACO REACH “provides an opportunity for healthcare insurers with a history of defrauding and abusing Medicare and ripping off taxpayers to further encroach on the Medicare system.”

“We have long been concerned about ensuring this model does not give corporate profiteers yet another opportunity to take a chunk out of traditional Medicare,” the lawmakers wrote, echoing PNHP’s concerns. “The continued participation of corporate actors with a history of fraud and abuse threatens the integrity of the program.”

https://www.commondreams.org…