Stop Direct Contracting from Destroying Medicare

The Centers for Medicare and Medicaid Services (CMS) under President Biden’s administration is moving ahead with Direct Contracting (DC), an ill-conceived plan announced, but not fully implemented by December 2020 under President Trump’s administration. The NRLN is demanding that President Biden and Congress kill the program.

The DC plan is aimed at the 41 million in original Medicare who would be auto-enrolled in a private plan. Furthermore, investor-backed startup so-called Direct Contracting Entities (DCEs) can be Accountable Care Organizations (ACOs), commercial insurers, and even Medicare Advantage (MA) new or existing MA plans. This could mean that the 24.9 million enrollees in MA plans might be converted to original Medicare to come under DCEs. The Health Affairs publication reported that already the pilot program includes 53 DCEs in 38 states and that 23 of them are investor owned. More DCEs are expected to be rolled out 2022.

While seniors can switch from an MA plan to original Medicare by their decision, they will be involuntarily placed into DCEs without their knowledge or permission.

DCEs will be paid monthly by the CMS to cover a specified portion of a patient’s medical care. This is a terrible shift from original Medicare’s direct reimbursements to healthcare providers. DCEs are allowed to pocket the funding they don’t spend on healthcare. This is a prescription for private insurers to skimp on healthcare for original Medicare patients.