'Can't Fool Us': 250+ Groups Reject Biden Rebrand of Trump's Medicare Privatization Ploy

More than 250 advocacy groups representing seniors, people with disabilities, doctors, and other constituencies made clear Tuesday that they're not remotely satisfied with the Biden administration's rebrand of a Trump-era pilot program that allows private industry to gain a foothold in traditional Medicare.

"HHS gave Direct Contracting a fresh coat of paint, but we can see right through it."

In a new letter addressed to Health and Human Services Secretary Xavier Becerra and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, the coalition warned that the revamped pilot program known as ACO REACH "retains the most dangerous elements" of the Trump administration's Medicare Direct Contracting experiment, which officially debuted in 2020 despite internal concerns about its legality.

"If allowed to continue, REACH would completely transform traditional Medicare by allowing third-party middlemen to manage seniors' care, without seniors' full understanding or consent," the letter states. "Millions of seniors who actively chose traditional Medicare will be automatically enrolled into REACH entities, many of which will likely be run by for-profit businesses, such as commercial insurers, venture capital and private equity investors, and even dialysis centers."

"Although REACH middlemen are required to notify seniors of their enrollment, few seniors are likely to understand the implications," the letter continues. "Because seniors are automatically enrolled into REACH based upon their relationship with their primary care provider, the only way for a beneficiary to opt out is to change primary care providers."

Last week, the Biden administration announced that instead of terminating the Trump administration's Medicare pilot program--as physicians and progressive activists demanded--it is moving ahead with the program under a different name and a slightly different structure. That approach won applause from the healthcare industry, which had lobbied for such reforms and against complete elimination of the program.

The Biden administration's changes are set to take effect in January 2023.

Doctors leading the charge against Direct Contracting (DC) argued that the new tweaks will do little to mitigate the threat the experiment poses to traditional Medicare, which covers roughly 36 million Americans.

In a Tuesday statement, Physicians for a National Health Program (PNHP) president Dr. Susan Rogers said that "HHS gave Direct Contracting a fresh coat of paint, but we can see right through it."

"REACH is simply a new name for the same backdoor scheme to privatize Medicare."

"Hundreds of community leaders joined forces to say: You can't fool us, we know Medicare privatization when we see it," said Rogers.

While Biden officials shrouded ACO REACH in a veneer of progressivism--emphasizing such goals as "addressing historical healthcare disparities" and achieving "greater transparency"--PNHP notes in a policy brief that the redesigned initiative "includes major giveaways to profit-seeking REACH middlemen that will open the door to increased profiteering in marginalized communities."

"Compared to DC, REACH gives middlemen less financial risk for health costs and quality, and more potential for profit at the expense of traditional Medicare and its beneficiaries," notes PHNP, which coordinated the new letter opposing REACH.

The group also accused the Biden administration of making a "superficial nod to equity that may lead to profiteering in underserved communities," pointing specifically to the REACH program's "no-strings-attached bonus for enrolling vulnerable beneficiaries."

"CMS created a 'Health Equity Benchmark Adjustment' to incentivize REACH middlemen to enroll underserved beneficiaries, determined by residence and Medicaid eligibility," PNHP observed. "CMS will give REACH middlemen an additional $30/month ($360/year) for each beneficiary in the top decile of the Benchmark, regardless of how much care each beneficiary receives."

Alex Lawson, executive director of Social Security Works--one of the signatories to the Tuesday letter--argued in a statement Tuesday that "REACH is simply a new name for the same backdoor scheme to privatize Medicare."

"Unless the Biden administration pulls the plug now, this program will put for-profit insurers and Wall Street between seniors and their doctors," said Lawson. "This letter shows how broad-based the opposition to REACH is. Tweaks aren't good enough--President Biden and Secretary Becerra must end this dangerous experiment immediately."