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Rep. Pramila Jayapal speaks at a press conference

Rep. Pramila Jayapal (D-Wash.) speaks alongside fellow progressive lawmakers following a meeting with President Joe Biden at the White House on October 19, 2021 in Washington, D.C. (Photo: Kevin Dietsch/Getty Images)

Jayapal Leads 50+ Democrats in Urging Biden to End Trump-Era Assault on Medicare

A Medicare privatization scheme launched in the final months of Trump's presidency poses a grave "threat to patient care and outcomes," lawmakers warned.

Jake Johnson

The physician-led effort to kill a Trump-era Medicare privatization scheme gained fresh momentum Wednesday as Rep. Pramila Jayapal—the chair of the Congressional Progressive Caucus—led more than 50 House Democrats in urging the Biden administration to cancel the Direct Contracting pilot program.

In a letter addressed to Health and Human Services (HHS) Secretary Xavier Becerra and Centers for Medicare and Medicaid Services (CMS) head Chiquita Brooks-LaSure, the lawmakers warned that the under-the-radar DC experiment poses a grave "threat to patient care and outcomes due to the encroachment of profit-driven organizations."

"If left unchecked, Medicare Direct Contracting will hand traditional Medicare to Wall Street investors."

Launched during the final months of the Trump administration, the pilot program is similar to Medicare Advantage in that it inserts a private middleman—be it a Wall Street-backed startup or a for-profit insurance giant—between traditional Medicare and healthcare providers.

Under the DC pilot, the middlemen are known as Direct Contracting Entities (DCEs), and they're paid monthly by CMS to cover a specified portion of a patient's medical care. DCEs are then allowed to pocket what they don't spend on care, prompting concerns that Medicare recipients will see the quality of their coverage decline as private firms seek to boost profits.

"These models ultimately aim to privatize traditional Medicare by funneling beneficiaries, without their knowledge, into a DCE," the 54 House Democrats wrote in their letter to the Biden administration on Wednesday. "Unfortunately for patients in these entities, DCEs are incentivized to funnel patients to providers within their networks to maximize profits which can limit patients' care options."

"These models transform the care of a traditional Medicare beneficiary to care typically seen in a private Medicare Advantage (MA) plan despite the fact that the patient chose not to enroll in an MA plan," the lawmakers added. "We ask that you permanently end the programs and coordinate the transition of traditional Medicare beneficiaries currently in these programs back into the traditional Medicare model by July 1, 2022."

Signatories to the new letter include prominent progressives such as Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), Rashida Tlaib (D-Mich.), Cori Bush (D-Mo.), and Barbara Lee (D-Wash.) as well as more moderate members of the House Democratic caucus, including Reps. Don Beyer (D-Va.) and Jim Cooper (D-Tenn.).

Despite mounting pressure to cut off the legally dubious pilot program, the Biden administration has allowed much of it to proceed as planned.

The 54 House Democrats sent their letter weeks after a group of doctors with Physicians for a National Health Program (PNHP) traveled to Washington, D.C. in an attempt to bring lawmakers' attention to the little-discussed DC pilot and demand that HHS stop the experiment in its tracks.

Thus far, the pilot includes 53 DCEs in 38 states, Washington, D.C., and Puerto Rico. A majority of the current DCEs—which are approved by CMS without input or oversight from Congress—are controlled by investors, not healthcare providers.

Physicians fear that if the Biden administration doesn't act, the DC pilot could result in the full-scale privatization of Medicare by 2030—without so much as a vote in Congress.

"HHS allows Direct Contracting Entities to keep as profit what they don't pay for in medical services, establishing a dangerous incentive to ration and restrict seniors' care," Dr. Susan Rogers, president of the 24,000-member PNHP, said in a statement Wednesday. "If left unchecked, Medicare Direct Contracting will hand traditional Medicare to Wall Street investors, without input from seniors, doctors, or even Congress."

"We applaud Rep. Jayapal and the more than 50 members of Congress who stood up to protect Medicare today and for future generations," Rogers added.

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