Ky. ARA to Medicare: Axe Direct contracting

Thanks to Kay Tillow for sending us this. Click here for more information.

By BERRY CRAIG

AFT Local 1360

The Kentucky chapter of the Alliance for Retired Americans has signed on to a letter urging Health and Human Services Secretary Xavier Becerra and Chiquita Brooks-LaSure, Centers for Medicare and Medicaid Services administrator, expressing “concern about Medicare Direct Contracting, a pilot program launched by the Center for Medicare and Medicaid Innovation (CMMI).”

The letter says that continuing the Direct Contracting (DC) program “would completely transform Traditional Medicare by allowing third-party middlemen to manage seniors’ care, without seniors’ full understanding or consent.”

Here is the rest of the letter:

“A majority of seniors choose Traditional (fee-for-service) Medicare over Medicare Advantage — the version of Medicare run by commercial insurers — because they value the free choice of health providers and the power to manage their own care. However, under the DC program, millions of seniors who actively chose Traditional Medicare would be automatically enrolled into Direct Contracting Entities (DCEs), many of which are run by for-profit businesses, such as commercial insurers, venture capital and private equity investors, and even dialysis centers.

“Although DCEs are required to notify seniors of their enrollment, few seniors are likely to understand the implications. Because seniors are automatically enrolled into a DCE based upon their relationship with their primary care provider, the only way for a beneficiary to leave the DCE is to change primary care providers, an extremely difficult task for many seniors but especially for those living in rural or other under-served areas. Requiring seniors to change their physicians of choice because of a policy change at CMMI is an undue burden, and does not serve the best interests of the public.

“One major concern is that the DC program’s payment model creates dangerous incentives to restrict care. While Traditional Medicare pays doctors and hospitals directly for care, the DC program pays DCE middlemen a monthly payment to cover a defined portion of each seniors’ medical expenses. DCEs are then allowed to keep as profit and overhead what they don’t pay for in health services, a powerful financial incentive to ration seniors’ care.

“The DC payment model not only threatens seniors’ care; it would drain Medicare of billions of dollars of needed revenue each year. Traditional Medicare spends 98% of its budget on patient care, but experts predict that some DCEs will only spend 60% of Medicare payments on care — keeping up to 40% of revenues for their own profit and overhead.

“We are also concerned about the lack of transparency in the DC program. Under this model, CMMI is empowered to implement DC across all of Traditional Medicare without any oversight or approval from Congress, without any statutory codification of the program, or without any input from seniors, health advocates, taxpayers, or other stakeholders. In fact, CMMI has publicly stated its intention to move all Traditional Medicare beneficiaries into programs like Direct Contracting by the year 2030.

“A majority of seniors choose Traditional Medicare because it is simple, efficient, and empowers them to manage their own health. We, the undersigned, urge you to respect seniors’ choices and protect Medicare by immediately terminating the Medicare Direct Contracting program.