Pascrell, Pocan, Porter Sound Alarm on Medicare Oversight

Trump administration pilot program threatens beneficiaries’ care

WASHINGTON, DC – U.S. Reps. Bill Pascrell, Jr. (D-NJ-09), Mark Pocan (D-WI-02), Katie Porter (D-CA-45), and Lloyd Doggett (D-TX-35) have written to U.S. Secretary of Health and Human Services Xavier Beccera and the Acting Administrator of the Centers for Medicare and Medicaid Services (CMMI) asking them to immediately freeze CMMI’s Trump-era Direct Contracting Entities (DCE) pilot programs.

“We are concerned that funneling people into Medicare Advantage-like plans not only eliminates beneficiary choice, but also erects more barriers and provides fewer consumer protections for beneficiaries,” the members write. “We are also concerned that the insurer DCE model creates additional risk for beneficiaries without adding any value. This model has less accountability than Medicare Advantage plans, which have been overpaid $143 billion between 2008 and 2020 according to MedPAC.”

Under this problematic model, beneficiaries who have deliberately chosen traditional Medicare over Medicare Advantage (MA) plans will be auto-enrolled in private plans offered by insurer DCEs within traditional Medicare. The model also allows insurer DCEs to maximize reimbursement through inflated Hierarchical Condition Category (HCC) codes and because of the pervasive nature of this practice in risk scores, we are alarmed that the insurer DCE may significantly increase costs without providing any value. The insurer DCE model creates additional risk for beneficiaries without adding any value.

Text of the members’ letter is provided below.

May 13, 2020

The Honorable Xavier Becerra                                                          Ms. Liz Richter

Secretary                                                                                             Acting Administrator

Department of Health and Human Services                                       Centers for Medicare and

200 Independence Ave, S.W.                                                             Medicaid Services

Washington, D.C. 20201                                                                    7500 Security Boulevard

Baltimore, MD 21244

Dear Secretary Becerra and Acting Administrator Richter:

We write to express concern with the Centers for Medicare and Medicaid Innovation (CMMI) Direct Contracting Entities (DCE) pilot program. We appreciate that you paused implementation of the Geographic model, and we were also pleased to see CMMI stop enrollment for any new providers in the Global and Professional Direct Contracting (GPDC) model. However, we remain worried that the 53 DCEs participating in the GPDC model, a policy launched under the Trump Administration lacks oversight to protect Medicare beneficiaries’ care.

Under this model, beneficiaries who have deliberately chosen traditional Medicare over Medicare Advantage (MA) will be auto-enrolled in private plans offered by insurer DCEs within traditional Medicare. It remains unclear how CMS will ensure beneficiaries will be able to switch back to traditional Medicare, or even how CMS will notify beneficiaries that they have been auto-enrolled into an insurer DCE. We are concerned that funneling people into Medicare Advantage-like plans not only eliminates beneficiary choice, but also erects more barriers and provides fewer consumer protections for beneficiaries. It is also unclear how CMS will monitor impacts to beneficiary access to care, the impact on current Accountable Care Organization (ACO) models, or possible excess payments made to insurer DCEs.

We are also concerned that the insurer DCE model creates additional risk for beneficiaries without adding any value. This model has less accountability than Medicare Advantage plans, which have been overpaid $143 billion between 2008 and 2020 according to MedPAC. The insurer DCE model offers a similar opportunity to maximize reimbursement through inflated Hierarchical Condition Category (HCC) codes. For example, one insurance company served 98 million people in 2020, compared to 96 million one year ago, and revenue per consumer served increased 29 percent in year-over-year for 2020 driven by the expansion of people served in value-based care arrangements and the increasing acuity of the care services provided.^[1] Because of the pervasive nature of this practice in risk scores, we are alarmed that the insurer DCE may significantly increase costs without providing any value.

As members of Congress committed to protecting Medicare beneficiaries, we ask that CMS immediately freeze the harmful CMMI DCE pilot program including the Geographic model and the Global and Professional Direct Contracting Model and evaluate the impact to beneficiaries. We look forward to your response.

Sincerely,

[1] UHC Q4 2020 Financial Results Press Release. https://www.unitedhealthgroup.com/viewer.html?file=/content/dam/UHG/PDF/investors/2020/UNH-Q4-2020-Release.pdf