A Boon for Wall Street

Medicare REACH allows third-party middlemen to “manage” care for Traditional Medicare beneficiaries, as did the Direct Contracting program before it. Wall Street investors and private equity firms put considerable amounts of money into some Direct Contracting and REACH entities, and they expect a handsome return on their investment.

How can Direct Contracting and REACH entities deliver these returns? One way is by maximizing the amount of money they receive from the Medicare program (through questionable, sometimes fraudulent, “upcoding” of patient records) and minimizing the amount of money they spend on patient care.

Dr. Ed Weisbart explains the “upcoding” scam

Policymakers describe the “Medicare Money Machine”

For more details on how investors siphon money from the Medicare program, see the crucial two-part Health Affairs blog, “Medicare Advantage, Direct Contracting, and the Medicare ‘Money Machine,’” authored by former Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Don Berwick and former Center for Medicare and Medicaid Innovation Director Dr. Rick Gilfillan:

“Given an Orwellian title, Direct Contracting, launched by the Center for Medicare and Medicaid Innovation, was anything but direct,” they wrote. “‘Indirect Contracting’ would have been a far more accurate name, since the cornerstone of the program was CMS’s opening the door to non-provider-controlled ‘Direct Contracting Entities’ to become the fiscal intermediaries between patients and providers.”

Ready to take action? Sign our petition demanding an end to Medicare REACH. You may also wish to call your member of Congress at (202) 224-3121. And be sure to let your friends, colleagues, and family members know about this ongoing threat to Traditional Medicare. Questions? Email organizer@pnhp.org.