Medicare Rights Opposes Potential New Medicare Model that Puts Beneficiaries at Risk

Last week, the Medicare Rights Center submitted comments to the Center for Medicare & Medicaid Innovation (CMMI) in response to a request for information on a potential new Medicare model. CMMI—an offshoot of the Centers for Medicare & Medicaid Services (CMS), which is the agency that oversees the Medicare program—was created to develop and test new ideas in health care delivery. Most of these ideas involve different ways of paying providers such as doctors or hospitals.

In this request for information, CMMI asked interested parties to provide input on ways to design and test a model for Direct Provider Contracting (DPC). In a DPC model, a beneficiary could choose to join a primary care or specialty provider’s practice and potentially gain certain benefits such as reduced cost sharing or increased services that Medicare does not generally pay for. While this idea may be intriguing, CMMI did not provide any detail on how such a model would work, which leaves some dangerous options on the table.

For example, CMMI did not rule out a DPC model including what is known as “private contracting” or “balance billing.” If private contracting were permitted, Medicare providers would be allowed to require beneficiaries to negotiate individually for their care and to sign contracts obligating them to pay costs in excess of Medicare’s allowed fees. Beneficiaries would not be able to rely on current Medicare rules that set limits on what participating providers can charge. This means providers could charge whatever they chose, and some people with Medicare would be priced out of health care. Losing this essential protection is just one of the ways a DPC model could potentially put beneficiaries at risk.

Another potential aspect of a DPC model—a per-person per-month or capitated payment—might encourage doctors and hospitals to withhold care. With a capitated payment, as seen in most managed care plans, providers may have an incentive to provide less care because they are not paid more for additional services. We also spotted areas where a DPC model design might encourage providers to discriminate against people with poorer health or chronic conditions. It is important that models be designed so that there is no “cherry picking” of healthier patients to save money on care. These issues make it necessary for CMMI to ensure there is robust oversight of any DPC model.

While Medicare Rights supports innovations in Medicare that increase access, quality, and affordability of care, we do not support ideas that strip beneficiaries of their fundamental protections, lead to worse outcomes, or increase costs. Because CMMI was not clear about what any future DPC model might include, we responded to many potential ideas that were not necessarily being contemplated. In our comments, we urged CMMI to provide further opportunities to comment on DPC proposals as details are fleshed out. We also requested that CMMI engage Medicare beneficiaries in all levels of model design to ensure these vital voices are heard.

We will continue to monitor and comment on model development to ensure beneficiaries have the protections they need in all aspects of the Medicare program.

Read our comments.

Read more about the request for information.

Read more about consumer protections in CMMI models.