Seniors’ Medicare Benefits Are Being Privatized Without Their Consent

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An Introduction

Ok, What is or who is The Lever? “The Lever, formerly known as The Daily Poster, is a reader-supported investigative news outlet that holds accountable the people and corporations manipulating the levers of power. The organization was founder and owner is David Sirota, an award-winning journalist and Oscar-nominated writer who served as the presidential campaign speechwriter for Bernie Sanders.”

What type of Org and how factual? Leftist and factual in content.

Overall, we rate The Lever Left Biased based on editorial positions supporting the progressive left. We also rate them High for factual reporting due to proper sourcing and a clean fact check record.

What do I think on Medicare? Approximately 40% of Medicare funding is out of General Revenues. At the same time if people opt out of Medicare for other things, Medicare should not be funding Advantage programs any more than what they fund traditional Medicare. MA programs must be competitive with traditional Medicare. So far, MA programs are not competitive with traditional Medicare.

Seniors’ Medicare Benefits Are Being Privatized Without Consent (levernews.com), Matthew Cunningham-Cook, March 2022

A new Medicare privatization scheme under President Donald Trump is being expanding under President Joe Biden and forcing hundreds of thousands of seniors into private Medicare plans without their consent.

The picture becomes clearer as to why MA plans are growing in numbers.

The development represents a troubling new dimension in the fight by corporate interests to privatize Medicare. Medicare is a federal health insurance program for people 65 or older. Medicare Advantage (MA) is a programs allowing for-profit health insurers to offer benefits through Medicare. The MA benefits can result in unexpected costs for routine procedures and wrongful denials of care. The MA plans have cost Medicare an astonishing $143 billion since 2008 and are resulting in record profits for some commercial health insurers.

The new Direct Contracting Entity (DCE) program adds a private-sector third party (MA) between patients and Medicare services. Medicare allows these intermediary companies to offer unique benefits, like gym membership coverage. The for-profit operations range from private insurers to publicly traded companies to private equity firms. To increase profits, they are limiting the care patients receive, especially when they are very sick.

What is Occurring

Medicare Advantage patients can choose to sign up for private insurance plans. Those in traditional Medicare plans suddenly finding they are in MA health care plans without plans informing them. As Rep. Pramila Jayapal (D-Wash.) noted in a January op-ed;

“Seniors in traditional Medicare may be ‘auto-aligned’ to a DCE if any primary care physician they’ve visited in the past two years is affiliated with that DCE. That means Medicare automatically searches two years of seniors’ claims history without their full consent to find any visits with a participating DCE provider as the basis for enrollment.”

Among those who unexpectedly found themselves caught up in one of these new DCE plans is Suzanne Gordon. Suzanne is a Healthcare policy analyst and blogger based in Richmond, California. She spent her entire professional career studying the U.S. health care system and advocating for Medicare for All and the VA. As a firm opponent of privatization in Medicare, she never signed up for a for-profit Medicare Advantage plan.

Suzanne was surprised one day when she got an email in January from her doctor at “One Medical”, a for-profit primary care practice on the West Coast backed by the private equity giant Carlyle Group. The email message was not particularly clear. She finally realized she was enrolling without her informed consent in a new private DCE plan run by Iora Health, a primary care provider “One Medical” purchased last year.

“I got the email, I clicked on it and began a signing process that didn’t tell me what I was signing. You sign, you click in, and they tell you that they want you to sign up for a DCE with Iora Health. I wrote back to my doc and said I won’t do this… I felt that a line had been crossed.”

Gordon, a health policy expert, was able to get out of the plan. Others have not been so lucky. Rep. Pramila Jayapal’s (D-Wash.) office told The Lever that 350,000 seniors were in DCE plans as of January 2022 — none of whom elected to sign up voluntarily.

This latest Medicare privatization scheme started under the leadership of a Trump official who has since launched his own “entrepreneurial firm focused on building and growing transformational health care companies,” with support from private equity firms. Now, the effort is quietly expanding under the Biden administration. The new ACO REACH program is under the direction of two former Obama administration officials who have revolved between jobs in government and the corporate health care industry.

The development means that even more of the country’s most vulnerable will be at the mercy of corporate arbiters they know little or nothing about.

Ed Weisbart, a physician who chairs the Missouri chapter of Physicians for a National Health Program (PNHP). PNHP is a doctors organization advocating for single-payer health care. Wd had this to say:

“Seniors and people with disabilities are, without their consent or full knowledge, being put into a program that has as its center the profit of the investment community rather than the health of Medicare members. The investment community has proven repeatedly they know how to work around the guardrails of any program that has been set up. They know how to do it.”

Privatizing Medicare

Launching the DCE program in April 2019 was by Trump’s Centers for Medicare and Medicaid Services (CMS), under the auspices of the CMS Innovation Center, known as CMMI later.

The creation of CMMI was under President Barack Obama’s signature health care law, the Affordable Care Act (ACA). It was to pilot new payment models in Medicare and Medicaid without going through the formal rulemaking process requiring public comment. As a result, the new DCE program, which assigns seniors to a privatized model without their consent, has never been subject to any public scrutiny whatsoever. Diane Archer, the CEO of Just Care USA, which works to fight Medicare privatization.

“All that DCEs do is privatize traditional Medicare.”

Meanwhile, Adam Boehler, who Trump tapped to run CMS’ Innovation Center, has since  formed his own firm, Rubicon Founders. The firm’s website claims it will “architect trans-formational companies and are deliberate in creating the foundation necessary to lead an industry,” but provides few details on how it will do so. Rubicon did not respond to a request for comment.

Boehler’s firm Rubicon Founders was launched with the backing of longtime private equity executive Annie Lamont, (married to Connecticut Gov. Ned Lamont [D]), and with the support of the health care-focused private equity firm Welsh, Carson, Anderson & Stowe (WCAS). WCAS is developing a series of primary care centers for Medicare Advantage patients with the help of Humana, a private health insurer which also launched a DCE program.

For Diane Archer, the evidence is clear:

“Adam Boehler… launched this [DCE] program to enrich his friends in the private equity world.”

“We Needed To Make Sure That CMS Continues This Journey”

Late last month, critics of DCEs said the Biden administration rebadged an expanded DCE effort under a new name — the “ACO REACH” program.

The new program stands for Accountable Care Organization Realizing Equity, Access, and Community Health or “ACO REACH.” A model allowing hospital-led managed care organizations to access the new Medicare privatization scheme. ACO REACH assigns patients with little or no informed consent to for-profit healthcare plans benefiting health care profiteers and creates incentives to deny care.

And you wonder why Meds are so expense??? Read the next paragraph. You can begin to see government working against the needs of people.

The DCE and ACO REACH programs are being spearheaded in part by CMMI head Liz Fowler, a former Obama administration official who helped write Obama’s signature health care act. As the chief health counsel to former U.S. Senate Finance Committee Chairman Max Baucus (D-Mont.). Earlier, she helped write the 2003 “Medicare Prescription Drug, Improvement, and Modernization Act,” legislation that barring the federal government from negotiating lower prescription drug prices.

Fowler served as vice president of public policy for the health insurer Wellpoint, now part of Anthem, before moving to Baucus’ office. She later became a health care aide in the Obama administration, before spending nearly seven years as a vice president for pharmaceutical giant Johnson & Johnson.

Neither Anthem nor Johnson & Johnson are currently active in the DCE market. Considering other major insurers such as Humana pursuing DCE contracts, and that Anthem already  offers Medicare Advantage plans; it is conceivable these insurance giants could get into the business at some point in the future.

In a February 24 press call announcing ACO REACH, CMS Administrator Jonathan Blum said the Biden administration has always been committed to continuing the DCE program.

“We want to make sure that we see these programs as continuing to grow… we have had many conversations with the public and with stakeholders that started with the new CMS team coming on board, We have felt from the start that we needed to make sure that CMS continues this journey.”

Jonathan Blum served as the deputy administrator and later principal deputy administrator of CMS under Obama before joining CareFirst BlueCross BlueShield as an executive vice president accoding to Legistorm (searchable database of congressional staff).

Fowler and Blum’s boss, CMS administrator Chiquita Brooks-Lasure, is a former health care partner at Manatt, Phelps & Phillips. A lobbying firm working to launch Medicare Advantage plans as recently as 2020.

Manatt, Phelps & Phillips played an integral role in reducing fines for nursing home violations in California by as much as 99.9 percent in the middle of the COVID-19 pandemic.

MPP declined requests for comment.

A Dangerous New Stage Of Medicare Privatization

Kip Sullivan, an attorney active with Physicians for a National Healthcare Program, said the DCE program relies on ensuring that elderly or disabled patients don’t have an informed choice about enrolling in the private health care plans.

“Seniors have been swept into DCEs without their knowledge. Many and probably most beneficiaries are in traditional Medicare as opposed to Medicare Advantage because they did not want to be in a plan run by an insurer.”

Sullivan pointed out . . . the publicly traded DCEs, like Oak Street Health, brag in investor filings of between 13 and 30 percent of the money they get from Medicare Advantage goes into profits. By comparison, according to Sullivan, traditional Medicare plans have overhead of just 2 percent. Adding:

“When Medicare passed in 1965, there was never an intention to enrich the insurance industry. But that’s exactly what’s happening.”

Weisbart, from the Missouri chapter of PNHP, is especially concerned that the Medicare and Medicaid agency “does not need to get congressional consent, discussion or approval for any of these programs. They’re able to do it on their own.”

Now here we have an issue of an agency empowered by Congress taking advantage of the delegated authority given to them by Congress. Was this intended? Ahhh, SCOTUS Mr. Roberts can you look into this? I do not think Congress (or most of it) intended this to occur.

Under Trump, the agency even issued a waiver that exempts DCE programs from anti-kickback rules that normally prohibit doctors from entering their patients into such for-profit plans. As a result, doctors can be compensated for involuntarily entering their patients into DCE programs.

Same issue here. Legalized graft, Mr. Roberts. But then much of Pharma is like this.

In recent months, advocates have been waging a full-court campaign against the DCE scheme. In January, 54 members of the House submitted a letter voicing similar concerns to Health and Human Services Secretary Xavier Becerra and CMS Administrator Brooks-Lasure.

What then, explains the Biden administration’s recent decision to expand the program?

As always in our campaign finance system, money could play a role. In 2020, the leadership of DCE contractor Clover Health donated $500,000 to the main super PAC for Senate Democrats, while the company’s financier Chamath Palihapitiya donated $750,000 to the same super PAC plus $250,000 to the Biden Victory Fund.

“One Medical” employed Suzanne Gordon’s doctor and owns Iora Health, the company trying to enroll her in a DCE. One Medical is backed by the Carlyle Group, a prodigious donor to both parties. Biden enjoyed Thanksgiving dinner last year at the $30 million Nantucket home of Carlyle co-founder David Rubenstein.

Bill Kadereit, the President of the National Retiree Legislative Network, said that the DCE program could usher in a dangerous new stage of Medicare privatization. Stating:

“Medicare Advantage plans have failed. Privatization has failed. The cost of Medicare is doubling every ten years because of the commercial health care sector campaign contributions. We’re seeing the disassembly and destruction of our precious public health system. Every place where the profiteers have stepped in costs have gone up and health outcomes have gone down.”

Seniors’ Medicare Benefits Are Being Privatized Without Consent (levernews.com), Matthew Cunningham-Cook, March 2022