FOR IMMEDIATE RELEASE: March 8, 2022
Media Contact: Clare Fauke, PNHP communications specialist, clare@pnhp.org
Today, more than 250 organizations representing seniors, people with disabilities, consumers, and health professionals sent a letter to Health and Human Services (HHS) Sec. Xavier Becerra and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, shunning the agencies’ rebranding of the controversial Medicare Direct Contracting program into “ACO REACH,” and calling for an end to all Medicare privatization experiments.
The signers range from major national groups like Public Citizen, Social Security Works, and The National Retiree Legislative Network, to local and regional organizations like the Consumers Council of Missouri and the California Alliance for Retired Americans.
“Hundreds of community leaders joined forces to say: You can’t fool us, we know Medicare privatization when we see it,” said Dr. Susan Rogers, president of Physicians for a National Health Program (PNHP), an organization of 25,000 doctors that support Medicare for All and oppose Medicare privatization. “HHS gave Direct Contracting a fresh coat of paint, but we can see right through it.”
Today’s letter calls on Sec. Becerra to immediately end Medicare REACH, reject the privatization of Traditional Medicare, and focus the agency’s resources on strengthening Medicare for generations to come. “If allowed to continue,” the letter states, “REACH would completely transform Traditional Medicare by allowing third-party middlemen to manage seniors’ care, without seniors’ full understanding or consent.”
“REACH is just privatization by another name and represents a fundamental threat to traditional Medicare and seniors’ access to care,” said Lisa Gilbert, Executive Vice President of Public Citizen. “This program would mean more profit for health care companies at the expense of seniors that choose Traditional Medicare and there is no reason for it to continue. We should be working to rein in profit in health care, not expand it.”
“REACH is simply a new name for the same backdoor scheme to privatize Medicare,” added Alex Lawson, Executive Director of Social Security Works. “Unless the Biden Administration pulls the plug now, this program will put for-profit insurers and Wall Street between seniors and their doctors. This letter shows how broad-based the opposition to REACH is. Tweaks aren’t good enough — Pres. Biden and Sec. Becerra must end this dangerous experiment immediately.”
“As one of California’s foremost Senior grassroots advocacy organizations representing over 1 million members, we are deeply concerned to learn of the intentions from CMS to ‘redesign,’ and not abolish, Direct Contracting in Medicare,” said Pauline Brooks, President of the California Alliance for Retired Americans (CARA). “The Direct Contracting model introduced by the former Administration severely undercuts consumer choice — once a core tenement of Traditional Medicare — and expands privatization, and dilutes patient care. CMS’ attempt to advance ‘health equity’ by forcing Traditional Medicare beneficiaries to enroll into REACH is entirely contradictory and a continuation of the disastrous privatization efforts instituted from its predecessor.”
“It is disappointing to see the Biden Administration following in the footsteps of Trump by allowing the Direct Contracting privatization scheme to stand by simply giving it another name,” said Julia Santos, Senior Healthcare Policy Manager for Indivisible. “The REACH program would allow middlemen to fill their pockets at the expense of Traditional Medicare beneficiaries. The Biden Administration can change course right now by directing Sec. Becerra to end REACH and protect Medicare from privatization.”
Dr. Rogers was especially critical of REACH’s superficial nod to equity, adding that, “REACH’s equity incentives are no-strings-attached financial giveaways to middlemen, and could encourage profiteering in underserved communities.” She noted that REACH’s required “equity plan” is a simple fill-in-the blank workbook on the CMS website.
For example, Dr. Rogers explained that under the new “Health Equity Benchmark Adjustment,” HHS will give REACH middlemen an additional $360 per year for each underserved beneficiary, regardless of how much care that beneficiary receives. REACH will also allow middlemen to inflate beneficiaries’ risk scores based on demographic factors, another opportunity to bolster revenues without increasing care, since like Direct Contracting, REACH allows middlemen to pocket up to 40% of Medicare payments as profit and overhead, incentivizing them to restrict the care of vulnerable seniors.
Physicians for a National Health Program (pnhp.org) is a nonprofit research and education organization whose more than 25,000 members support single-payer Medicare for All reform.
