The privatization scheme threatening Medicare: "Direct Contracting Entities (DCE)"
From: The Labor Campaign for Single Payer
What Is It?
During the Trump Administration, the Centers for Medicare and Medicaid Services (CMS) Innovation Center launched a “Direct Care Pilot Program,” which has continued under the Biden Administration.
It permits Direct Contracting Entities (DCEs) — usually insurance companies or investment firms — to be for-profit middlemen, collecting money from the federal government to reimburse primary care providers for Medicare patients. This could turn traditional Medicare primary care, and possibly other medical care, into a “Medicare Advantage”-type program. Like Medicare Advantage, the DCE program creates incentives for insurance companies and other for-profit entities to restrict or deny access to healthcare under the guise of saving money. This is not an innovation, this is an attack on Medicare!
Why Unions Should Care
Medicare provides bedrock healthcare coverage for retired and disabled union members, and serves as a template for the fulfillment of labor’s historic commitment to making healthcare a right. Unions have fought to protect and expand retiree healthcare. They know how the privatization of public services undermines the public good. Allowing insurance companies and hedge fund managers to be the gatekeepers for retiree healthcare is a recipe for disaster.
Why this DCE Pilot Must be Stopped:
It will cost all taxpayers more — an additional $7 billion was spent on Medicare Advantage patients in 2019 compared to traditional Medicare — yet with worse outcomes for seniors!
CMS exceeded its statutory authority in designing and implementing the DCE pilot. It radically transforms Medicare through privatization, without Congressional authority nor oversight.
Estimates show DCEs can keep up to 40% of all savings, a powerful incentive to limit healthcare.
Investors — rather than healthcare providers — already control more than half of the DCEs; this means corporations with no knowledge or experience in medicine (let alone an incentive to provide full coverage), have input into what types of services Medicare beneficiaries may receive.
The model could be expanded beyond primary care to include other care currently provided.
It violates the strict requirements for assessments and studies of impact on targeted populations
It’s expanding unchecked: there are 53 DCEs in 38 states, potentially covering 30 of the 35 million Medicare beneficiaries — who can be enrolled without knowledge, consent, or the ability to opt out!
How to Stop it:
Health and Human Services Secretary Xavier Becerra has the authority to stop this pilot!
Senator Elizabeth Warren and Representative Katie Porter have held hearings on the DCE program.
Over 50 Members of Congress, led by Representative Pramila Jayapal, have signed a letter to Secretary Becerra asking that he discontinue the program. Advocates are also exploring the possibility of a lawsuit.
Our allies at Physicians for a National Health Program are coordinating the fight: pnhp.org/StopDCEs
Here’s How You Can Help:
Ask your union to sign this letter before February 28th: tinyurl.com/Letter-Stop-DCEs
Contact your Congressional Representative and ask that they send Sec. Becerra a letter similar to Rep. Jayapal’s. Find a template and more info here: tinyurl.com/Congress-DCE-Letter
Share this flyer with other labor and civic organizations and ask that they lend their voice to help stop this insidious program before it is too late! bit.ly/DCEsFacts