Direct Contracting: Turning Regular Medicare into Medicare Advantage

[serenitytoo]

A recent news article reported on a program that might start to privatize Medicare.  It was started under the former President and is for now being continued by the current President.  I wonder why I haven't seen the usual AARP activism on this topic.  Following are extracts from the article

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At issue is a Trump administration-initiated program that many health-care reformers argue is essentially a backdoor attempt to further privatize Medicare. Almost no one realizes it’s going on — except, that is, corporate interests and private equity investors, who are lined up like pigs at the trough to get their hands on taxpayer dollars.

Medicare is administered in one of two ways: traditional fee-for-service Medicare and Medicare Advantage — private insurance offered in place of and through the Medicare system. The dispute is over something called the Direct Contracting pilot program, designed by the Center for Medicare and Medicaid Innovation as a new way of managing benefits in the fee-for-service program. Supporters say it will reduce the amount of money the government spends on traditional Medicare fee for service while improving the quality of patient care.

Already, Direct Contracting is increasing the hold of Wall Street and the world of private equity on Medicare. The Centers for Medicare and Medicaid Services say 53 companies have signed up and have been approved to administer the program, which began earlier this year. They are, for the most part, a mix of publicly traded health-care companies and insurers, and private equity backed start-ups.

The lure of Direct Contracting for these companies is potential profits. The limits on the amount of money a Direct Contracting entity can keep that’s not used for a patient’s medical needs is significantly more generous than those imposed by Medicare Advantage.

And while patients choose to sign up for Medicare Advantage themselves, with Direct Contracting, the primary care doctor, not the patient, enrolls in the program. And why would a doctor sign on? Well, one participant, Clover Health Partners,  says doctors can earn upward of 40 percent more on primary care visits through the program. (When I asked about that, a spokesperson for Clover told me the higher pay did not affect how much Clover earned from Medicare.)

Once their doctor is enrolled, patients receive a letter from the Direct Contracting company informing them of their participation. They are assured they are still in Medicare’s fee-for-service program and can still see any doctor they wish in the Medicare program. “Your doctor asked Clover Health Partners to see that you get the right care at the right time,” reads the missive sent out by that company. “We will coordinate your care according to your individual medical needs and treatment choices.” The program will, it adds, “work to reduce duplicate tests and duplicate paperwork that cost you time and money.”

The technical term is to say a patient’s care is being “aligned” by the Direct Contracting entity. Heath-care activists use another phrase. “It’s Medicare Advantage by another name but suddenly it’s not voluntary,” Archer says. She argues that doctors in the program can also be incentivized to refer within a particular network or recommend a particular regimen of care. And unlike in Medicare Advantage, the patient won’t necessarily understand that there is a corporate monitor.

The Biden administration did put at least a temporary stop this year to an even more egregious form of this program which would have auto-enrolled almost all those in Medicare fee for service in a particular preselected geographic area. But CMS, HHS and, ultimately, the White House are continuing to press ahead with Direct Contracting, even though they could end it if they chose.

So how could something like this fly so under the radar? Well, the details are very technical, so, many people receiving notice of the change likely didn’t comprehend it. The program itself has not received much attention from the media. And information about it isn’t all that easy to come by. We don’t even know for sure how many people are experiencing “aligned” care; CMS says that data won’t be available till next year.

But here’s what we can say: An undetermined number of people enrolled in traditional fee-for-service Medicare are now taking part in an experimental program designed during the Trump administration to increase the role of big business in their medical care. And the Biden administration, which could easily stop this, is instead continuing to enable Trump’s scheme. That’s a big mistake — one that it could easily fix.

[AudreyJ781325]

My aging husband had been on Traditional Medicare for years. UHC calling several times per week. They did talk to my husband and expressed how they could save him money on his plan...so in 2018 they put him on a PPO plan for which he didn't think to ask what the difference was. The following year 2019, they again called and he was then put into an HMO plan. He was diagnosed with dementia, then Alzheimer's. He fell and broke his ankle and it's been a nightmare with Skilled Nursing stays being ejected before he could walk. In addition, any of the newer drugs were denied that would have helped his bones to repair. Only 20 days allowed in SNF with MA, and TM would have been 100 days!

[LaDolceVita]

My aunt had to go back to traditional Medicare because the Advantage plan would not allow her the 100 days she needed to recover from a stroke.  The nursing home handled the conversion for us.  Since it is open enrollment now perhaps you can get him back to Medicare now.

I hate those commercials pushing these plans on people promising rides to the doctor and meal deliveries.  Oh and partial refund of premiums in some areas.  Sounds like they are trying to take advantage of a vulnerable population.

[BethA95117]

I abhor the pending ACO-Reach, fancy new name for destroying the best parts of medicare, such as highly efficient 2% admin cost 98% of my tax dollars to medical needs. 

the fancy new ACO-REACH will allow venture capitalists to take 40% admin/profit sharing by squeezing the 98 cents of the medicare premium dollar currently delivered as care to patients.
.

i implore AARP to oppose this.  Why is AARP silent?

[shayati]

Yes, it's ruthless. AARP is making money off the Advantage, DCE, and now ACO Reach plans. That's why AARP says nothing. At this year's open enrollment, having learned about the problems with Medicare Advantage plans, we got off our plan, still in that dark about DCE and Reach programs, we signed up for an AARP drug plan. Now I'm wondering if it is a DCE/Reach type plan? Does all this apply to drug coverage, anyone know? It's all done so secretly, so dishonestly. 

[BonW997756]

I have been trying to get my name & info off Ilumed (ACO/DCE) with Reach, I left the primary doctor that auto-aligned me with Ilumed. They will not delete you, just put a note next to your name ‘Do not call’. They need the numbers (people auto aligned) to succeed.

[GailL1]

You probably need to write the doctor and ilumed Health too to take you out of their listing.  Request it formally and tell them to remove you from all records.   In this day and age, that maybe hard to do.

They may also have your med records which you might need when you go to another doctor or health group - so maybe you need to request those too.

[GailL1]

@BethA95117 

You do know that some of these groups have been set up by doctor's themselves right?

For Traditional Medicare, it is listed on the Medicare compare website - details under each doctor.

[lbandrew]

Just received this.   February 25, 2022 Dear health justice advocate,  After relentless pressure from PNHP and our allies, the Centers for Medicare and Medicaid Services (CMS) announced late Thursday that they are terminating the controversial Medicare Direct Contracting program, four years ahead of schedule.   The bad news is that CMS is doubling down on its scheme to privatize Medicare, through a new program with a different name but the same Wall Street profiteering as before. CMS, you can’t fool us. We know Medicare privatization when we see it, and we won’t back down until it’s stopped.

When PNHP launched this campaign three months ago, the DC program was flying under the radar of both seniors and Congress. But through our tireless advocacy, organizing, and media outreach, we’ve succeeded in making Direct Contracting a toxic name. CMS had to respond. But instead of rejecting this backdoor privatization model, they tried to push it back under the radar with a new name — “ACO REACH.” Just like it’s evil twin, Direct Contracting, the proposed REACH program would:  Pay third-party middlemen a flat fee to "manage" seniors' health, allowing them to keep up to 40% of what they don’t spend on health care as profit and overhead. Automatically enroll Traditional Medicare beneficiaries into REACH without their full understanding or consent.  Require beneficiaires to change primary care providers if they wish to opt out of the program. Allow virtually any type of company to be a REACH middleman, including those owned by commercial insurers and private equity investors, as well as every company currently participating in the DC program.  Wall Street is betting on Medicare privatization as their next big score, and it will take a movement to stop them. Susan Rogers, M.D. President PNHP

[somarco]

Google this . . . "accountable care organizations go bust"

Medicare approved 32 pioneer accountable care organizations in December 2011; of which 19 remained active through 2015.[7] When the program concluded in the end of 2016, only nine of the original 32 Pioneers remained.[8] As of April 2015, Medicare had approved 404 MSSP ACOs, covering over 7.3 million beneficiaries in 49 states.[9] For the 2014 reporting period, MSSP ACOs saved a combined $338 million, or $63 per beneficiary.[10]

https://en.wikipedia.org/wiki/Accountable_care_organization

ACO's are a failed business model.

[GailL1]

Medicare.gov Coordination of Care

Medicare.gov Accountable Care Organizations | Medicare

The business model of ACOs have changed since they 1st came into being under the ACA but they are still out there and seem to be going strong under the umbrella of coordination of care.

Some beneficiaries need this coordination of care a whole lot in Traditional Medicare. It isn't just about the savings - it is about the coordination of care - good care-  although just by reasoning, they should save some money in the long run.  

Similar to the MA Special Needs Plans that work similar except these sometimes have an institutional links.   

[somarco]

@GailL1 government motivation behind this move is saving "taxpayer" dollars, not improving care. DC wants to get out of the health care financing business by transferring the risk to private insurance carriers. That is also why CMS is so heavily promoting and funding MA plans.

The majority of ACO's have failed and the few that still survive prove this is not a cost effective move. Whether or not their are improved outcomes is questionable.

When you have worked around managed care as long as I have you know the much touted improvements in care are mostly non-existent.

There is a reason why a number of physician practices do not participate in any managed care plans.

[GailL1]

There are currently 483 of them an increase of 66 over last year - serving almost 11 million beneficiaries - over and under 65 years old.

They are beneficiaries that are within the Medicare Savings program - low income but not low enough for Medicaid.  They aren't paying Part B premiums and may get help with their meds too.  Since the government (fed/state) is paying for their care out of tax payers money - the government has a bigger say in the medical options (picking provider and self-referrals) than in the general program where folks can do this as much as they want.  This is why there needs to be coordination of care - for the care standard and the care cost.

CMS.gov  News Release 01/26/2022 Medicare Shared Savings Program Continues to Grow and Deliver High-...

Today, the Centers for Medicare & Medicaid Services (CMS) released data showing that Accountable Care Organizations (ACOs) are serving a growing patient population, according to CMS’ annual summary of the Medicare Shared Savings Program, which is Medicare’s national ACO program. CMS projects that over 11 million people with Medicare will be served by Shared Savings Program ACOs in 2022.

[serenitytoo]

Thanks for posting.  I found a link for this "new" program at https://innovation.cms.gov/innovation-models/aco-reach 

It's way too complicated for me to understand, but perhaps that's the point.

[GailL1]

---

@serenitytoo wrote:

Thanks for posting.  I found a link for this "new" program at https://innovation.cms.gov/innovation-models/aco-reach 

It's way too complicated for me to understand, but perhaps that's the point.

---

Actually it isn't complicated at all 

1.  It is your doctor who actually joins into one of these groups.

2.  The doctor or the place where you see him like a clinic or group will probably give you a disclosure for you to acknowledge that your will be within one of these Direct contracting entities.

3.  They should explain all the care that you will get, how and any other extra benefits that they will offer.  Some will even offer some of them to family caregivers or family counseling under their mental health benefits.   There are many different coverage benefits and they are all a part of the model - It is under Medicare's  Coordination of Care.  

4.  Covered under Medicare - Original and participating MA plans 

5.  You can refuse but if your doctor is part of the group, you may have to find another doctor.

These links may help you understand it more - especially the 2nd one

Medicare.gov Coordinating Your Care

Medicare.gov Global & Professional Direct Contracting Model

This is one that is not too far from me - 

IORA Primary Care Virtual Tour   down about middle of the page.  

Not all of them are exactly the same; but in model, they are - caring for the WHOLE patient in a coordinated fashion - with all providers working together to produce a (bigger/better) result.  

Some offer transportation to appointments, perhaps meals during a healing time, perhaps some home care when needed for a short term.  

[lbandrew]

There is recent Congressional testimony by a knowledgeable physician on DCE's (now rebranded as ACO-REACH.) Dr. Susan Rogers has no financial incentive.  If the url is scrubbed, search  "Dr. Susan Rogers US Senate testimony on DCEs".

https://www.youtube.com/watch?v=nhGtZMZIvVE

There is another video posted yesterday by a Dr. Ed Weisbart about the shiny new veneer that is being applied to DCE's following exposure of this scam to the Senate, this new rebranding as REACH. https://youtu.be/zvWyqLG2gcM

(if scrubbed, search "DCEs are called WHAT now?"  and video)

The bottom line, as viewed by knowledgeable physicians, is that all of these models put profit-driven middlemen (insurers, Venture Capitalists) between physicians and patients.  Traditional Medicare spends 98% of its money on patient care, 2% on administration.  Medicare Advantage spends about 85% on patients, 15% on "administration".  DCE/ACOs will spend about 60%. on patients, 40% on "administration"  What can be saved by upcoding (increasing the apparent severity of disease of patients in order to get more monthly fees for each patient from Medicare) and under-providing (restricting patient access to testing, specialists etc) is pure profit to middlemen.  Don't be fooled by the bling.  You need the 98% of Medicare that you paid for all those years, not a relatively cheap gym membership.

What is missing from the official sites is HOW YOU OPT OUT of this system, without losing a doctor with whom you may already have a longstanding relationship. 

I can see no indication that there is any requirement of disclosure by your existing source of care of a change to this profitable system, nor any method of an individual opting out.  But I certainly intend to do so, even if it requires changing doctors.  

I am waiting to see AARP's take on this scheme, but considering that they SELL insurance and may well be planning to benefit.... well.....not holding my breath.  

[serenitytoo]

Thanks for your reply,  There are four entities involved in this model:  Medicare, Doctors, The Middlemen, and Us.  Medicare wants less cost, Doctors want more pay, and Middlemen want to earn a good profit.  How do we think "Us" will fare?

[GailL1]

Yes I actually heard & saw the testimony live - I thought it was a last minute fill in - cause it really wasn't a Q&A like the other participants with different Senator asking questions.   One Senator gave Dr. Rogers pretty much a speech platform followed by their own speech.  It was a real letdown. Thought I was gonna learn something new - Didn't - just more political divide stuff.

DCE's are an experiment - 5 years - if they don't produce results Medicare (CMS) will pull back.  Let's watch and see - the number of them are very limited this year to 50 something nationwide.  

How can analysis be already out there since they are so new? 

I am all for coordination of care.  We already do this in ACO's and we already do this for certain disease specific groups.  

I know people in my general area that are going to the one I posted about and they LOVE it - all of them are on Original Medicare but they also take some Medicare Advantage plan beneficiaries too from what they have told me.

It is the doctors that actually join the DCE group - in fact some of them are founded by a doctor group.  When a beneficiary begins, they are given an info sheet and disclosure which they acknowledge stating how this type of care works, how it works with Medicare and that they have the right to still see any other doctor - but that this specific doctor is a member of this group so if they want the doc - they have to be in this type of care plan.

We often hear that even though a patient is being treated, esp. chronically ill folks, that treatment goes down if something in thier life prevents them from following a docs order.  This is a way to fill that void - and hopefully the patients are better for it.

I'm sure after this year, MedPac will begin their analysis of how things went with the patients and with the cost.  

If you know where these stats come from let me know who and where - I am not talking about some article - I want to see the actual data.

[r199400r]

Have you gotten any response from AARP on its position on DCEs?

[GailL1]

Do you know what the Medicare Direct Contracting model is?

Maybe this will help:

Medicare.gov - Global & Professional Direct Contracting Model

Basically, it is a Medicare (5) year experiment in a payment model to see if it provides better and more coordinated care to some Medicare beneficiaries and to evaluate the cost of it.  

I know several people who have enrolled (1) - I know of (2) different ones in the Atlanta metro area.  Enrollment seems to be brisk around the areas where they are concentrated.

[Silveryflox]

As you read the link it says numerous, numerous times that it is splitting the risk taking. What the heck is that. It sounds like someone’s life is a roulette game. It sounds like the stock market. 

[GailL1]

Risk adjustment is a method by which Medicare (CMS) adjust their payments to doctors or MA plans for those who are sicker than others.  

[Silveryflox]

HMO sounded good at first too. They make decisions on what you can and can’t get. Put business in between Medicare and doctor and soon the doctor “in the name of quality” will be persuaded not to provide certain life preserving measures. You will only be able to do it the DC way. If I wanted that I would of got a advantage plan. 

[ReTiReD51]

.

What AARP thinks about Chronic Care Coordination and Accountable Care Organizations

“Higher costs could negate potential savings from ACOs’ gains in efficiency”

[john258]

It is correct that the Advantage Program was to be the start of taking Medicare to private hands of Insurance Carriers. The Carriers were to be paid what it cost medicare plus 15% for everyone in their plans. That means an additional expense to Medicare. Each Carrier numbered their plans so they could just not offer a plan if it did not make money at future enrollment times. The ACA started to roll back that 15% so it would drop to what Medicare paid per member plus a cost of claim paying for the member. That would make the cost to Medicare zero. Sadly that never happended.

One of the loudest opponents to the Medicare approach were the Insurance agents who lost their large commissions from Carriers. When you have a planned loss ratio of over 90% there is no money for agents. That should be something everyone should look at when they hear agents telling us how bad it is.

The under age 65 market has been hurt by the actions of the Carriers in their pricing, and that is why we see it moving toward under age 65 medicare approach. Notice how C19 is being handled. It is the start of Medicare under 65 and even with the Insurance agents  against it will in time become what we have. No group or person should be allowed to make a lot of money off health care. We all need it and use it.

All should know that under Medicare it uses Cos. to pay and adjust claims. Most of these Cos. are really Insurance Carriers who set up a co to do this and they rightfully make money for providing this service.

There never has been a free market in Insurance. Early on States took on the job. or controlling Carriers as the Carriers showed they could not handle that job themselves. The rules vary by State. Some States are very tough and even control pricing, coverage, who can sell, finical end etc. NY is a very tough State and many Carriers set up a pup Carrier for that State to avoid all of their rules.

There are many Org. like AARP which have helped their members with information and insurance plans. The Teachers, Labor Unions are 2 other examples of groups doing this. In My State the State, County and City have a hand. The county has a drug discount policy on everyone who lives in it. The low income depend on govt. to do this. One group that over the years has opposed all of this are the Insurance Agents as they become an unneeded cost.

As I said we are moving to medicare under 65 and it will come.

[somarco]

One of the loudest opponents to the Medicare approach were the Insurance agents who lost their large commissions from Carriers.

That's odd . . .

Agents generally earn 2x to 3x higher FYC on MA vs Medigap. Add in the add-on products . . . cancer . . . life insurance . . . hospital indemnity and it is not unusual for an agent to ear 4x, 5x or more than offering Medigap coverage.

Care to cite your claim?

It certainly did not come from agents who actually work in the field with real clients.

[john258]

Life insurance is totally different from Medical so do not compare them. Cancer should and would be covered under Medicare for under 65 so separate policy not needed, but I am sure there will be add ons that agents will try and sell. It will be like the In Hospital coverage sold by some Carriers and agents as medical insurance.

Agents have been in the field from the start and is one reason the States took some control years ago.

There will be a savings to our medical costs when the need for Insurance agents is ended by medicare for under 65 is in place.

[serenitytoo]

You may also have heard how some companies have been sued for padding their Advantage programs.

This is one headline from the Department of Justice: "Sutter Health and Affiliates to Pay $90 Million to Settle False Claims Act Allegations of Mischarging the Medicare Advantage Program" dated August 3.  And this one, also from the Department of Justice: "Government Intervenes in False Claims Act Lawsuits Against Kaiser Permanente Affiliates for Submitting Inaccurate Diagnosis Codes to the Medicare Advantage Program" dated July 30.

If the crackdown on overbilling continues, I wonder how many companies will continue to expand their Advantage programs, with likely reductions in quality to those already in them.

[GailL1]

Medicare has been a source of waste, fraud and abuse for a long time - we have dedicated law enforcement and inspectors that are supposed to stay on top of it.  Most government programs also have some aspect of waste, fraud and abuse.  

But then there are those cases where there is just a difference in what the data is showing, or what is actually going on and they have to work it out perhaps with a hefty fine til the next time and then rinse and repeat.  

[Silveryflox]

there is waste fraud and abuse in every part of the market health care and otherwise. The little guy gets the blame and the big time bankers, investors, etc…. Walk away with the dough. The more hands in the pot the more waste and the less the end client receives as care. Economics is a good course to take.