President’s Forum 134 – ACO REACH Is Lipstick on a Pig

NRLN President’s Forum – ACO REACH Is Lipstick on a Pig Based on earlier messages you may be aware that the NRLN opposed the Center for Medicare and Medicaid Innovation Center’s (CMMI) Direct Contracting Entities (DCEs) which threatened to destroy original Medicare. Under pressure from the NRLN, other Medicare advocacy groups and a few members of Congress, CMMI has announced that on January 1, 2023, DCEs will be changed to the Accountable Care Organization Realizing Equity, Access and Community Health (ACO REACH) Model.

In my Clarion Call column in the spring NRLN FOCUS newsletter posted on the NRLN website I call ACO REACH putting lipstick on the DCE pig. Click on the FOCUS graphic on www.nrln.org.

CMMI is now accepting applications for ACO REACH from the 51 DCEs and 453 ACOs. This will speed up the effort to privatize original Medicare.

The ACO model is not a model in practice, it is simply an unproven shelter for heterogenous healthcare entities that is supposed to serve original Medicare enrollees. Instead, they are formed by individuals who want to use federal tax dollars to consolidate, capitalize and operate on the shoulders of taxpayers.

ACOs, formed in 2013, are paid original Medicare Fee-for-Service (FFS) rates plus undisclosed federal subsidies. CMS never has disclosed a set of ACO financials or the dollar value of subsidies paid or whether they match the costly Medicare Advantage scheduled $50 billion subsidies to insurance companies this year.

On February 28, I sent a letter to Medicare Trustees requesting they include in their 2022 report to Congress ACOs’ revenues, cost and profitability (including all special incentive payments). This information should be compared with all other parts of Medicare in the annual report. A letter asked the MedPAC commission chairman and executive director to include the information on ACOs in its 2022 report to Congress. (The letters are posted at: https://www.nrln.org/letters-to-washington-2/)

The NRLN doesn’t understand what CMS trying to prove. Original Medicare carries 2% overhead, Medicare Advantage carries a subsidized 15% overhead and profit burden and the DCE model trial companies expect federal subsidies to help cover 40%. It is unknown what level of taxpayer rebates and incentives ACO REACH will be provided.

Recently, Alyson Parker and I had conference calls with staff members of the House Committee on Ways and Means and the Senate Finance Committee to express the NRLN’s concerns about ACO REACH. The NRLN will continue to oppose ACO REACH and anything else that threatens original Medicare.

Bill Kadereit, President
National Retiree Legislative Network