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Be wary of Medicare Advantage and Direct Contracting Entities

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By H. Dixon Turner, M.D.
Portsmouth (N.H.) Herald, January 17, 2022

To the Editor:

Until recently I did not understand the reason for the explosion of ads for Medicare Advantage plans on television. My understanding changed after I received communication from the Physicians for a National Health Plan organization.

Medicare Advantage plans function like HMO’s: they receive a set payment from Medicare for each enrollee and then manage how those funds are used to pay for the enrollee’s health care. The patient’s health care options are often restricted or limited to a selected panel of providers. The plans often encourage over coding which increases the cost of the Medicare Advantage plans compared to traditional Medicare.

Late during the Trump administration an even more insidious effort was made to privatize Medicare. That program established Direct Contracting Entities (DCE), which like Medicare Advantage plans, receive direct monthly payments from the Medicare fund for each enrollee. With DCE plans, seniors can even be automatically enrolled into a DCE without their full knowledge or consent. These DCE plans can spend as little as 60% of the funds that they receive from Medicare for health care services and then keep up to 40% of those revenues as profit! Studies have also shown the DCE’s and Medicare Advantage plans encourage over-coding and the use of medically questionable studies or intervention to further maximize their profits.

As of April 2021 there were 53 DCE’s operating in 43 states and DC. Twenty eight of these plans are investor owned and six more are managed by insurers. Traditional Medicare spends ~98% of its budget on direct patient care while, as mentioned above, DCE’s can retain up to 40% of their revenues as profit. This arrangement provides an incentive for these DCE’s to restrict patient care. In 2019 Medicare spending was $330 billion but by 2025 it is projected that Medicare DCE’s could potentially collect $660 billion from the Medicare Trust Fund.

I would urge seniors to be very wary of signing up for Medicare Advantage Plans since like DCE’s, those plans are designed to improve financial outcomes, not clinical outcomes. Also I would urge everyone to call their Senators and Representative to encourage them to stop the dangerous DCE program. One could also contact Xavier Becerra—the Secretary of Health & Human Services.

https://www.seacoastonline.com…

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