SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
aco reach
Washington Complicity in Half-Century Privatization of Medicare
Since passage of the 1965 Medicare law, special interests inside and outside of government have continually bent the intent of Medicare in order to maximize corporate profits at the expense of taxpayers, seniors, and the disabled.
Jun 03, 2024
The authors of "The Privatization of Everything: How the Plunder of Public Goods Transformed America..." describe the corporate campaign to turn public goods and services into private profit-centers, paralleling the U.S. half-century $50 trillion wealth transfer upward. Promoting increasing commodification of healthcare, the U.S. is the only developed nation to place profiteering middlemen between patients and providers. Corporate/Wall St. exploitation of U.S. healthcare as a cash cow since 1980 has contributed to higher health costs and worse outcomes than other advanced nations.
A 1971 Oval Office conversation between President Nixon and John Ehrlichman augured misplaced healthcare priorities. Extolling the Kaiser CEO's profit-seeking, Ehrlichman enthused: "All the incentives are toward less medical care, because the less care they give them, the more money they make."
Nixon's 1973 HMO Act ushered in "Managed Care" health models, including Health Maintenance Organizations, Accountable Care Organizations and Medicare Advantage, many morphing into "Managed Profit," because neoliberalism yields wealthcare not healthcare.
Washington Accelerates Medicare Privatization
Since passage of the 1965 Medicare law, special interests inside and outside of government have continually bent the intent of Medicare in order to maximize corporate profits at the expense of taxpayers, seniors, and the disabled. With plutocratic intent Newt Gingrich in 1996 blithely forecast that privatization would cause Medicare to “wither on the vine.”
The 2003 Medicare Modernization Act was G.W. Bush's giveaway to the PhRMA and insurance industries. Even as it prohibited negotiation of bulk medicine rates, the MMA subsidized Medicare Advantage plans with extra billions of dollars annually siphoned from the Medicare Trust Fund, overcharging taxpayers up to $140 billion annually by 2023.
An obscure provision of MMA, the Employer Group Waiver Plans (EGWP), furthers Medicare privatization by permitting employers to move retirees, without their consent, into for-profit Medicare Advantage plans. Retiree organizations in Vermont, New York, and Delaware have waged David vs. Goliath-style battles to preserve their Traditional Medicare coverage against the subterfuge of Medicare Advantage "modernization" of benefits, which actually represent benefits "reduction."
CMS Betrayal: Promotion of Medicare Advantage
A 2023 report by the Center for Economic and Policy Research (CEPR) relates that privatized Medicare Advantage plans drain the Medicare Trust Fund, while increasing insurers' profits and reducing quality of patient care. Failing to protect Medicare's Trust Fund, the Centers for Medicare and Medicaid Services (CMS) has failed to halt overpayments to private Medicare Advantage plans. The Center for Medicare Advocacy (CMA) cites CMS outreach and enrollment materials since 2017 that encourage beneficiaries to choose private Medicare Advantage plans over Traditional Medicare.
Excess Medicare Advantage payments fund supplemental benefits and heavy marketing to lure enrollees, while brokers are paid commissions twice as high to sell Medicare Advantage plans than to sell Medicare Medigap plans. Moneymaking schemes of both Medicare Advantage and the Affordable Care Act have employed deceptive marketing, sometimes switching people's insurance without their consent. Some seniors intending to enroll in Traditional Medicare have been enrolled in a private Medicare Advantage plan. Too many seniors discover too late that MA's frequently-changing, narrow doctor networks expose them to substantial out-of-network costs, and that they are denied access to necessary care.
Medicare Advantage payments are inflated by "upcoding," which exaggerate patient health conditions; capitated payments incentivizing healthcare denial; and prior authorization requirements that delay and deny healthcare. Medicare Advantage "cherry-picking" selects the healthiest for coverage, and "lemon-dropping" rejects sicker patients.
ACA Fast-Tracking of Medicare Privatization
The Affordable Care Act created the Center for Medicare and Medicaid Innovation (CMMI) to conduct Medicare "innovative payment" experiments, modeled on "Managed Care" ACOs. Since first testing ACOs in 2005, CMS has authorized hundreds of private Managed Medicare ACO insurance models that amplify administrative costs. In 2023 the Congressional Budget Office reported that CMS experiments with "value-based" ACO payments failed to control costs, improve quality or increase equity, costing Medicare $5.4 billion more than it saved during its first decade.
An official CMS webpage titled "Fraud and Abuse Waivers” lists Innovation Center models that have been granted waivers to bypass fraud and abuse laws, to permit testing "innovative payment and delivery models" of healthcare—the better to milk the Medicare Trust Fund. CMS has invited the same investor-controlled insurance and Wall St. actors that drive Medicare Advantage overpayments to act as fiscal intermediaries between providers and patients within successive Trump DCE and Biden ACO REACH Alternative Payment Models.
Every administration since 2000 has welcomed some CMS administrators through Washington's Revolving Door. Prior to, or following government service, some have headed investor-backed health startups. Tom Scully, G.W. Bush's CMS head, oversaw privatized prescription drug benefits and Medicare Advantage before joining a private equity firm to capitalize on public dollars. Liz Fowler has rotated through the Revolving Door, between executive positions with insurance and pharmaceutical industries, alternately helping to draft both the Medicare Modernization and Affordable Care Acts, and subsequently returning to the Biden administration to oversee CMMI that she helped write into the ACA.
Even as CMS promotes experimentation with costlier multiple private payer models, they disregard single-risk-pool Medicare that alone has the economy of scale to provide sustainable universal health coverage, while permitting global budgeting and bulk medicine rate negotiations. Twenty-two studies report annual $600 billion Medicare-for-All administrative savings alone, enough to extend comprehensive health coverage to all ages.
Rather than improve and expand the promise of direct-payment Single-Payer Fee-For-Service—a model utilized by many advanced nations—CMS has promoted privatization of most public healthcare programs. Describing the goal of placing "100% of Traditional Medicare beneficiaries and the majority of Medicaid enrollees in accountable care relationships by 2030," CMS transfers Medicare recipients without their consent into private ACO REACH plans, "auto-aligning" Medicare enrollees with ACO-affiliated providers.
"Don't Bust Up Medicare and Turn It Over to the States," writes Kay Tillow of the latest misguided attempt to drain the Medicare Trust Fund, purportedly to achieve health care state by state.
If Health and Human Services, CMS and legislators fulfilled their responsibility to protect Medicare for the People, the plan would have been streamlined long ago. There would be no need for complicating costly supplemental insurance plans such as Parts A, B, C, D, and Medigap.
The non-profit law organization, the Center for Medicare Advocacy, defender of Traditional Medicare, affirms that "Few programs in the history of the United States have brought as much benefit to society as Medicare... Reforms to Medicare should honor and maintain its core values to ensure its continued success for future generations."
We must eliminate the greed of the market ethos, prioritize health as a human value, and support the aspiration of the Poor People's Campaign—i.e., an economy and healthcare for the people, eliminating continuous wealth transfer upward.
Addendum
A traditional Medicare enrollee for over a decade, CMS recently notified me that my health provider has been moved to a MSSP ACO, where 11 million beneficiaries were reportedly transferred by 2023. To retain Traditional Medicare, recipients are forced to find independent providers not captured by ACO payment plans, and to do so before CMS drains the Medicare Trust Fund and totally destroys Medicare.
Keep ReadingShow Less
Why Are Corporate Healthcare Fraudsters Being Handed 'Get Out of Jail Free Cards'?
Waivers given by the Center for Medicare and Medicaid Services allow venture capital, private equity, and health insurance entities the freedom to violate anti-corruption laws without penalty.
Jun 12, 2023
The Center for Medicare and Medicaid Services (CMS), the federal agency that oversees those national health care programs, has the dubious distinction of being light years ahead of other government regulators in excusing fraudulent conduct. CMS doesn’t just allow healthcare companies to repeatedly commit fraud and abuse with fines amounting to a tiny fraction of the profit; CMS goes much further.
CMS formally authorizes the violation of anti-corruption laws by granting “fraud and abuse” waivers to the corporate entities involved in experimental programs within its Center for Medicare and Medicaid Innovation (CMMI or Innovation Center).
It’s true. CMS has an official webpage named “Fraud and Abuse Waivers” that lists the programs entitled to their absolution.
The Innovation Center plans continue because they serve a different purpose—an unnamed purpose. They serve the privatization of the Medicare program.
CMS regularly issues “Fraud and Abuse Waivers” to the healthcare industry giants that participate in its Innovation Center programs impacting millions of people. If it’s an Accountable Care Organization (ACO), the new form of the hated, managed-care organizations (HMOs) of the 1990s infamous for drive-through mastectomies, it won’t be held accountable to the laws of the land.
How can this be possible? The Affordable Care Act of 2010, among its many provisions, set up the Innovation Center within CMS to promote experimental models in Medicare that would save money while maintaining or improving quality, or that would cost the same while improving the quality of care. Models approved by CMS can be automatically implemented into Medicare without congressional approval.
The Innovation Center models are not working to accomplish the stated purposes of quality and cost savings. “The majority have not saved money, and several are on pace to lose billions of dollars,” reports Bill Frist, former senator and owner of the giant hospital chain HCA. The majority of models do not show significant improvements in quality, says Brad Smith, former Innovation Center director. The models are neither saving money nor improving care, but the Innovation Center has $10 billion dollars to spend each decade and keeps churning out new models, the latest on June 8.
The Innovation Center models are the ones to which CMS grants the Fraud and Abuse Waivers. Let’s take for instance Medicare Advantage plans that are advertised to offer cash back on your Social Security check or up to $900 a year in grocery money. Those offers would logically be a violation of the law that forbids the offer of inducements to buy a certain plan. But these plans operate under the Innovation Center experiment called “Medicare Advantage Value Based Insurance Design (VBID) Model.” That model has the “get out of jail free card” from CMS. For the plan year 2023, the VBID Model has 52 participating Medicare Advantage Organizations with a total of 9.3 million people projected to be enrolled.
CMS waives the Beneficiary Inducements Civil Monetary Penalty (CMP) and the Federal anti-kickback statute to allow Medicare Advantage VBID plans to provide these cash, grocery, and other incentives. The excuse is that these payments are contributing to equity by ending disparities. The reality is that such plans provide incentives for seniors and the disabled to choose the for-profit plans rather than traditional Medicare. That’s convenient for the Medicare Advantage companies that are using the Medicare Trust Fund as their cash cow. Medicare Advantage plans cost the nation more than traditional Medicare yet deny, delay, and limit care. So why is CMS promoting the growth of these plans?
Among the long list of accountable care organizations (ACOs) and other models that CMS excuses from obeying the law is the Vermont All-Payer ACO Model Vermont Medicare ACO Initiative which is called OneCare ACO Vermont. The League of Women Voters of Vermont and the Physicians for a National Health Program of Vermont, among others, urged an end to the Innovation Center’s One Care ACO experimental model stating that the for-profit OneCare ACO, by design, does nothing to improve access to care and that the ACO was supposed to reduce costs, but, instead, spending continues to rise even faster than established targets.
The Vermont organizations issued a press release and listed eleven reasons why the program should be ended, including the assertion that both hospitals and primary care are suffering from the program. “It is time to redirect wasteful administrative spending on the ACO to actually providing health care, especially as the coronavirus pandemic exposes and exacerbates inequities in our system,” the Vermont organizations concluded.
That Vermont experiment by the Innovation Center has the fraud and abuse waivers. The for-profit OneCare Vermont is exempted from the federal physician self-referral law and the anti-kickback law. The program is scheduled to continue through the end of 2024 despite the community’s protests over the damage that OneCare Vermont has done to the health care of the state.
The privatization of Medicare, through Medicare Advantage and Innovation Center models, requires the freedom of corporate medical and insurance entities to collect overpayments, escape oversight, avoid regulation, and violate anti-corruption laws without penalty.
The Innovation Center granted the fraud and abuse waivers to the Direct Contracting model and to its successor program ACO REACH. ACO REACH currently has 132 participants in states across the country and places seniors and the disabled who chose traditional Medicare into for-profit, private Medicare ACOs. Seniors are assigned, without their consent, to ACO REACH plans owned by private equity, venture capital, and insurance companies which can take upwards of 25% of the Medicare money for profit and overhead. In addition, ACO REACH creates an incentive that increases profits with the denial or restriction of care.
The Innovation Center models are not working to produce cost savings and quality. CMS continues them anyway ignoring a storm of protest by health care advocates. The Innovation Center plans continue because they serve a different purpose—an unnamed purpose. They serve the privatization of the Medicare program. All of these plans have private managers, middlemen intervening between patients and their physicians or other caregivers.
Why would a government agency issue waivers for fraud and abuse? Why would that agency give venture capital, private equity, and health insurance entities the freedom to violate anti-corruption laws without penalty? What possible good can come from this and why should the Innovation Center be allowed to continue to exist?
The privatization of Medicare, through Medicare Advantage and Innovation Center models, requires the freedom of corporate medical and insurance entities to collect overpayments, escape oversight, avoid regulation, and violate anti-corruption laws without penalty. CMS allows massive overpayments, bribes, and denials of care, as it places our cherished Medicare into private hands. As CMS issues waivers of fraud and abuse laws, the privatization is unleashed on an unsuspecting population.
Keep ReadingShow Less
No Amount of Fraud Deters Government Agencies When It Comes to Privatizing Medicare
Sadly, getting the fraudsters out of ACO REACH will not improve a program designed to enrich corporations and harm patients. This entire apple cart needs to be overturned.
Feb 01, 2023
On January 17, the Center for Medicare and Medicaid Innovation (CMMI) announced 48 new model participants in a controversial pilot program called Accountable Care Organization: Realizing Equity, Access, and Community Health, better known as ACO REACH. CMMI, created by the Affordable Care Act, is supposed to test alternative payment models for Traditional Medicare to lower costs and improve, or at least not worsen, the care of 30 million seniors and people with disabilities.
The program, launched in the waning days of the Trump Administration as Direct Contracting, was greenlighted by the Biden Administration in 2021 and renamed ACO REACH in 2022. The model, which started with 53 contracting entities under Trump has grown to 132 participants with 131,772 health care practitioners and organizations providing care to over 2 million beneficiaries on Traditional Medicare under President Biden. Startling research found many of the ACO REACH participants have a history of Medicare fraud. Nevertheless, Medicare continues to sign contracts with them.
ACO REACH is a program designed to privatize what is left of public Medicare. Half of Medicare has been privatized through Medicare Advantage plans, which receive up-front “capitated” payments for Medicare beneficiaries from the Center for Medicare and Medicaid Services (CMS) and have the power to decide whether and how much of those Medicare dollars to spend on the beneficiaries who signed up for their plan. The Affordable Care Act allows Medicare Advantage plans to keep up to 15% of these Medicare dollars for administrative fees and profit (although they have clever ways to get around this restriction). To make these profits, Medicare Advantage plans create narrow networks for their beneficiaries, deny and delay care, and get overpaid by CMS, cashing in on billions of Medicare dollars.
What earthly reason would there be to exclude companies from ACO REACH but allow them to continue their plunder in Medicaid, Medicare Advantage, and subsidized on the ACA Exchanges?
ACO REACH uses similar tactics to those found in Medicare Advantage to profit from Medicare by overcharging Medicare, financially incentivizing providers to control healthcare costs for beneficiaries, and increasing the number of beneficiaries in their plans. But while some seniors “choose” to participate in Medicare Advantage, seniors and people with disabilities are auto-enrolled into an ACO REACH through their primary care physicians (PCPs). Thus, it is physicians and physician practices which are being lured into or forced to join the ACO REACH (Many physician practices are being swooped up by private equity or created whole-cloth). Physician practices, or their controllers, are enticed by the “shared savings” they will collect if they save money on their patients, shredding the trust between doctors and patients.
Once the PCP joins, their patients are automatically enrolled into the ACO REACH, without their informed knowledge or consent. While Medicare Advantage plans are allowed to keep 15% of the capitated fee for profits and administration, ACO REACH organizations, which include private equity and venture capital firms, as well as Medicare Advantage plans and insurance companies, can keep up to 40% of the capitated, up-front fees from Medicare as profit, guaranteeing themselves excessive payouts as they play out the eventual demise of the Medicare Trust Fund.
We were assured by CMMI that the new vetting process for all applicants was supposed to “ensure participants’ interests align with CMS’s vision.” They promised to protect beneficiaries and the model with “more participant vetting, monitoring, and greater transparency.” They pledged to employ “increased up-front screening… monitoring… and stronger protections against inappropriate coding and risk score growth.”
Yet, in a letter sent by Senator Elizabeth Warren (D-Mass.) and Congresswoman Pramila Jayapal (D-Wash.) to CMS Administrator Chiquita Brooks-LaSure in December 2022, they called on CMS to investigate nine organizations that had signed contracts to become an ACO REACH: Centene, Sutter Health, Clover Health, Adventist Health System/AdventHealth, Humana, Vively Health, Cigna/CareAllies, Bright Health/NeueHealth, and Nivano Physicians. The letter pointed out that all these organizations have been accused, investigated, settled claims, and/or sanctioned by governmental agencies for Medicare fraud and abuse.
Recently, CMMI Director Liz Fowler—a poster child for the revolving door in D.C.—was a guest speaker at the ACO REACH educational forum held by the California Public Employees Retirement System, the largest public pension fund in the country. When asked about private equity in ACO REACH, Fowler responded, “My personal opinion, you can’t say that private equity is inherently bad or good, but the way we viewed it, we want to make sure that the organizations in our program are in it for the right reasons.” And the right reasons for Fowler might very well be profit, given that six of the nine organizations identified by Warren and Jayapal are publicly traded in the stock market.
The entire apple cart needs to be overturned and replaced with a national, non-profit, single-payer healthcare system that covers everyone from birth to death...
Given Director Fowler’s personal opinion of private equity firms, it comes as no surprise that most of the Medicare fraudsters—including: Cigna/CareAllies, accused by the Justice Department of using a primary care program to defraud Medicare; Bright Health/NeueHealth, fined $1 million by the Colorado Division of Insurance for complaints from consumers and providers; Clover Health, which failed to let investors know it was under investigation by the DOJ as it was going public and even fined by CMS in 2016 for engaging in marketing activities that misled their beneficiaries; AdventHealth (formerly Adventist Health System), that paid $115 million to settle allegations of improper financial arrangements with referring physicians and for miscoding claims; Humana that overcharged Medicare by $200 million according to a federal audit; and Nivano Physicians, previously under a corrective action plan with the Department of Managed Health Care for lacking financial solvency—all made it through and became approved as ACO REACH.
Only three of the original nine identified in the Warren-Jayapal letter failed to get a contract with CMS: Centene, Sutter Health, and Vively Health. Fowler refuses to say whether these corporations pulled out on their own, or were rejected.
The Centene Corporation, with Medicaid contracts in 29 states, settled potential fraud claims in a dozen states to resolve Medicaid fraud claims for an estimated $1.25 billion. Sutter Health, a major California-based healthcare system, agreed to pay $90 million to settle allegations of knowingly submitting inaccurate information about the health of beneficiaries in the Sutter Medicare Advantage plans. DaVita HealthCare Partners Inc., one of the largest for-profit kidney dialysis providers and parent company of Vively Health, paid $450 million in 2015 to settle a whistleblower lawsuit, which accused DaVita of “intentionally wasting medications in order to overbill Medicare.”
What earthly reason would there be to exclude companies from ACO REACH but allow them to continue their plunder in Medicaid, Medicare Advantage, and subsidized on the ACA Exchanges?
The hypocrisy of CMS and CMMI is on full display. As is their collusion with the profiteers. Sadly, getting the fraudsters out of ACO REACH will not improve a program designed to enrich corporations and harm patients. The entire apple cart needs to be overturned and replaced with a national, non-profit, single-payer healthcare system that covers everyone from birth to death with all necessary medical services including long-term care, hearing, vision, dental, and prescription drugs. Only then can we stop worrying about the fraudsters.
Keep ReadingShow Less
Most Popular