Published: Feb. 16, 2022, 5:38 a.m.
Maximilian Brockwell and James Tyler Moore are first-year medical students at Northeast Ohio Medical University. Both serve on the leadership board for the local chapter of Students for a National Health Program.
ROOTSTOWN, Ohio — On Jan. 19, President Joe Biden spoke to a press conference touting the accomplishments of his first year in office, praising his administration’s COVID-19 response and approach toward health care policy. Conveniently, he failed to mention one glaring issue that will affect more than 2.4 million aging and vulnerable Ohioans — he has spent an entire year squandering the opportunity to protect them from a dangerous Donald Trump-era plan to privatize Medicare.
The pilot program, which began to roll out in 2021, introduces private companies known as “direct contracting entities” (DCEs) as middlemen between the Medicare program and health care providers. This experimental model currently spans 38 states, including Ohio. On paper, the rationale is to reduce cost by spreading financial responsibility between the government and third parties. However, under the false guise of risk-sharing, private groups can siphon massive amounts of cash away from seniors to line their own pockets.
Watchdog organizations are raising alarms about the myriad ways DCEs can take advantage of the system. DCEs would negotiate with hospitals and physician groups, and if successful, will automatically switch patients to this new insurance plan without informed consent. While there is an option to opt out after the fact, the opaque process will add to an already confusing maze of hurdles seniors must navigate to access necessary medical care. It may also lead to many patients being forced to find new physicians if they don’t want to participate.
The amount of funds distributed to a DCE is determined by the “risk scores” of their patients, a value estimating a person’s cost of care. This naturally incentivizes a trick called “upcoding,” which is a process where providers are pressured to use diagnoses with higher risk scores and thus higher levels of reimbursement. The companies then keep the difference between their allowance from Medicare and the true cost of treatment. Financial analysis has shown that just a 0.1-point increase in risk scores across the Medicare population would lead to overpayments nationwide in the range of $15 billion, including $3.5 billion in profits for the middlemen.
Perhaps unsurprisingly, more than half of DCEs already approved to participate are owned by private investors, including hedge funds with little experience in health care. Their goal is simple: increase profit margins. Efficiency will be an afterthought in this overcomplicated system, and the autonomy of Medicare patients across the country will be caught in the crosshairs.
All of this is happening under the watch of the Centers for Medicare & Medicaid Services, the federal body that oversees Medicare under the direction of the executive branch, independent of congressional oversight. The buck stops with Joe Biden, and so far, he has failed to act to prevent this private takeover of Medicare coverage.
In his Jan. 19 remarks, Biden boasted that, “We cut health insurance premiums for millions of American families,” yet Medicare premiums and deductibles are both set to increase by nearly 15% in 2022. It is hard to see how allowing the program to be taken over by Wall Street investors could have any alleviating effect on its potentially massive cost to the country or to individual beneficiaries.
Thousands of concerned health care professionals have joined together to halt this program through petitions and letter writing. There is still time for citizens’ voices to be heard, and for Biden to act, while the program is still in its infancy. Before Ohio taxpayers’ money is wasted and their right to choose their own Medicare coverage has been stripped, Biden should walk the walk of health care reform by doing the right thing and protecting Medicare recipients, not the legacy of Trump, or the profits of the middlemen.