Physicians for a National Health Program: Doctors and Health Advocates to HHS Secretary Becerra – End Medicare Direct Contracting, Don't Tweak It

CHICAGO, Illinois, Feb. 16 (TNSPol) -- Physicians for a National Health Program issued the following news release on Feb. 15, 2022:

A group of 25,000 physicians and health professionals sent a LETTER to Health and Human Services (HHS) Secretary Xavier Becerra, demanding that he reject proposed changes to the controversial Direct Contracting (DC) pilot program and instead end it immediately.

The doctors, members of Physicians for a National Health Program (PNHP), were joined by leaders from Pubic Citizen, Social Security Works, and Just Care USA in calling on Sec. Becerra to end the program.

"Direct Contracting Entities (DCEs) and their Wall Street investors hoped they could fly under the radar of seniors, health care advocates, and members of Congress," said Dr. Susan Rogers, president of PNHP, an organization of 25,000 physicians who support Medicare for All and oppose Direct Contracting. "Now that HHS is feeling pressure to end this backdoor privatization of Medicare, the industry thinks they can save it with minor tweaks and cosmetic fixes. But we won't back down until Direct Contracting is shut down, for good."

On Monday night, members of the DCE industry sent a letter to Sec. Becerra, asking him not to cancel the DC program but to "improve" it by, among other things, implementing unspecified "guardrails."

In response to the industry's letter, PNHP reminded Sec. Becerra that DC has tarnished the reputation of HHS, and ending the program would demonstrate a commitment to improved integrity and the best interests of beneficiaries. The letter points to the conflicts of interest present at the program's inception: DC was developed in 2019 by Adam Boehler, who, prior to leading the CMS Innovation Center (the agency responsible for the DC program), was founder and CEO of Landmark Health, which later won a DC contract. After leaving the administration, Boehler was co-founder of Rubicon Partners, which is now partnering with physician practices to join DC or Medicare Advantage (MA) programs.

PNHP also explained that as long as the program provides a profit motive for DCE middlemen, they will find a way around proposed "guardrails" on abuse. "Our experience from Medicare Advantage (MA) shows that when regulators install new guardrails that threaten profits, the industry will simply build a bigger truck to run them over," the letter said, noting that despite government efforts to rein in fraud, it overpaid MA insurers by more than $106 billion from 2010 through 2019.

Several other advocacy groups called on Sec. Becerra to end, not tweak, the DC program.

"Direct contracting is nothing more than privatizing Medicare," said Alex Lawson, Executive Director of Social Security Works. "It inserts a corporate bureaucrat between a patient and their doctor in order to deny care and make Wall Street money. The Biden administration must completely eliminate Direct Contracting -- nothing less than that is acceptable."

"We can't afford even more for-profit middlemen getting between America's seniors and the care they need, especially seniors that chose to avoid Medicare Advantage for a variety of reasons," added Eagan Kemp, the Health Policy Advocate for Public Citizen. "HHS should be working to strengthen Medicare, not pushing seniors into an untested program where for-profit companies can benefit by denying care. There are much more savings to be had by cracking down on Medicare Advantage than through pushing seniors into Direct Contracting."

Diane Archer, President of Just Care USA, which advocates for seniors and caregivers, said, "Medicare Advantage data show that putting insurers between patients and their doctors threatens patients' health and drives up costs," "Direct Contracting is another version of Medicare Advantage, but worse, because it overrides people's choice of Traditional Medicare. We need to end it now, before it destroys Medicare."

* * *

February 15, 2022

To: The Honorable Xavier Becerra, Secretary, U.S. Department of Health & Human Services, 200 Independence Avenue, S.W., Washington, D.C. 20201

Dear Secretary Becerra,

We are a group of 24,000 physicians and other health professionals who are deeply concerned about a threat to Traditional Medicare (TM). The Direct Contracting (DC) pilot program, initiated under President Trump but continued under President Biden, is handing control of TM beneficiaries' health care to third-party middlemen called Direct Contracting Entities (DCEs); DCEs include firms controlled by commercial insurers, for-profit hospital and dialysis chains, and private equity investors.

Last night, a group representing the DCE industry sent you a letter/1 asking you to fix, not end, the program, arguing that ending DC now would undermine the work of the CMS Innovation Center (CMMI). Quite the opposite: DC has tarnished the reputation of CMMI, CMS, and HHS, and ending the program would demonstrate a commitment to improved integrity and the best interests of beneficiaries.

Recently, advocates and journalists have drawn attention to the conflicts of interest present at the program's inception. DC was developed in 2019 by then CMMI director Adam Boehler, who, prior to joining CMMI, was founder and CEO of Landmark Health, which later won a DC contract./2 After leaving the administration, Boehler was co-founder/3 of Rubicon Partners, which is now partnering/4 with physician practices to join DC or Medicare Advantage (MA) programs. During this time, HHS's own Office of General Counsel warned/5 that the DC draft program proposal referenced specific entities (Chen Med, Oak Street Health, Verily), raising serious ethical concerns that the program was established to benefit these companies. Several of the companies later won contracts/6 to be DCEs. Because of the industry influence during the program's development, as well as the dangerous incentives for DCEs to earn greater profits by restricting patient care, we believe that superficial tweaks and cosmetic changes will not alter DC's fundamental flaws. Below we address some of the industry's suggested "refinements," and explain why they won't end this dangerous threat to Medicare.

Limit program participation and increase provider control: The industry, particularly the association of ACOs, suggests that CMMI increase the percentage of providers in each DCE's governing body, currently set at a minimum of 25%./7 However, even with more provider governance, DCEs are ultimately accountable to investors, which include private equity firms and commercial insurers active in MA. Investors want a return on their investment, creating a dangerous incentive for DCEs to both maximize revenues through upcoding, and minimize medical expenditures by restricting patient care.

Add "guardrails": The DCE industry is vague on proposed guardrails, but our experience from Medicare's other managed care experiment, Medicare Advantage (MA), shows that when regulators install new guardrails that threaten profits, the industry will simply build a bigger truck to run them over. For example, MA insurers engage in a kind of fraud called "upcoding/8 ," exaggerating or fabricating patients' diagnoses to earn higher capitation payments. Despite government efforts/9 to crack down, insurers consistently find more sophisticated ways to updcode, such as using AI software to scan patient records for upcoding opportunities, paying/10 doctors to document additional diagnoses, sending insurer- employed nurses to seniors' homes/11 , and buying provider practices/12 outright to control the coding process. As a result, Medicare overpaid MA insurers more than $106 billion/13 from 2010 through 2019.

Add "beneficiary protections": Industry lobbyists are vague about this proposal, but at its core, DC is a bait-and-switch for beneficiaries who chose TM because they value free choice of provider. Medicare "aligns" beneficiaries into a DCE without their full understanding or consent. The DCE then sends beneficiaries an annual notice, marked "No Action Required," which they are unlikely to read or understand. Seniors cannot opt out of a DCE unless they change primary care providers. In addition, the model gives DCEs a strong financial incentive to steer patients to their network of "preferred providers."

Implement a rebranding and name change: Until recently, most Medicare beneficiaries and most members of Congress had never heard of DC, for good reason: The program was never meant to be publicly scrutinized, or even publicly known. DC was created by the CMS Innovation Center/14 , which is empowered to test and implement health payment models without Congressional approval or beneficiary input. Changing DC's name will only confuse and insult the beneficiaries it claims to serve.

From HMOs to Medicare Advantage to Direct Contracting, Medicare has been "experimenting" with managed care models for nearly 40 years. These models have never reduced spending or improved patient care. If middlemen in health care actually saved money and improved outcomes, the U.S. wouldn't have the most expensive and ineffective health care system in the world. We don't need to put seniors and people with disabilities through another failed experiment to prove this.

The DCE industry represents its own interests and that of its investors, and does not speak for physicians. As physicians, we urge you to end the dangerous DC program and work tirelessly to strengthen and protect Traditional Medicare, both for today and for generations to come.

Sincerely,

Dr. Susan Rogers, President, Physicians for a National Health Program

View footnotes at: https://pnhp.org/system/assets/uploads/2022/02/PhysicianLetterToSecBecerra_20220215.pdf