FOR IMMEDIATE RELEASE: Nov. 22, 2021
On Tuesday, Nov. 30 at 10:00 a.m. ET, a group of physicians from across the U.S. will gather outside the headquarters of the Dept. of Health and Human Services (HHS), where they will deliver a petition demanding an immediate end to Medicare Direct Contracting (DC), a program launched in the final months of the Trump administration that could fully privatize Traditional fee-for-service Medicare in the next few years, without a vote by Congress.
DC is a pilot program that aims to enroll every Traditional Medicare beneficiary into a third-party “Direct Contracting Entity” (DCE), often without seniors’ knowledge or consent. Instead of paying doctors and hospitals directly for care, Medicare gives DCEs a monthly capitation payment to cover a defined portion of each seniors’ medical expenses, allowing DCEs to keep as profit and overhead (up to 40% of revenues) what they don’t pay for in medical services — establishing a dangerous incentive for DCEs to restrict seniors’ care.
Virtually any type of company can apply to be a DCE, including commercial insurers, venture capital investors, and for-profit dialysis chains. Applicants are approved by CMS without oversight from Congress. The DC “pilot phase” includes 53 DCEs in 38 states, potentially covering 30 million Traditional Medicare beneficiaries.
“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,” said Dr. Ana Malinow, a physician from San Francisco who will travel to Washington on Nov. 30 to deliver the petition. “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. Health and Human Services Sec. Xavier Becerra has the power to stop this Trump-era program in its tracks, and must do so now.”
More information on Medicare Direct Contracting:
- Direct Contracting one-page fact sheet
- Direct Contracting policy primer (4 pages)
- Form sent to seniors in Indiana University Hospital System requesting voluntary alignment to a DCE
- Article about Direct Contracting in Health Affairs journal by former CMS Administrator Dr. Don Berwick and former CMS Innovation Center director Dr. Rick Gilfillan: PART ONE and PART TWO
- List of current DCEs
- CONTRACT between CMS and Direct Contracting Entities
- Direct Contracting Entities’ Financial Operating GUIDE from CMS
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.