Medicare: What are DCEs And Why Should You Care?

Andara Puchino

When Katie Porter speaks, you can believe what she says (10 minutes, but very important)

Have you ever heard of Direct Contracting Entities? If you have you are a rare person. I just became aware of them when I was directed to this article on a website called

Direct Contracting Entities are referred to as DCEs. These are organizations that were inserted in between the traditional Medicare (TM) recipient and their doctors during the Trump years. As with so many things during the Trump years, as the clowns drew our attention to their circus, the bureaucrats were destroying the machinery of the government out of sight.

Thus the Biden Administration inherited this mess along with numerous other messes that needed to be cleaned up and put back to good running condition. He also inherited agencies full of staffers loyal to Trump who will oppose returning things to working condition. Think Post Office.

The DCEs act somewhat like Medicare Advantage, which really isn’t medicare but is actually managed care using taxpayer money. Let’s go to the article for a better explanation:

“As recently as early December 2021 the program, known as Direct Contracting, wasn’t on the radar of most Medicare beneficiaries or members of Congress.  Rep. Pramila Jayapal (D-WA) called it the “biggest threat to Medicare you’ve never even heard of.”

But by early January, 54 lawmakers had joined Rep. Jayapal in signing a letter urging Health and Human Services Secrectary Xavier Becerra to permanently end the controversial program.  Direct Contracting, the letter said, would maximize the profits of new fiscal intermediaries while limiting the care options of the 38 million beneficiaries of traditional Medicare, which now offers free choice of any doctor or hospital.


Introducing Middlemen into Medicare

Initiated under President Trump but continued by President Biden, Direct Contracting would insert middlemen — Direct Contracting Entities (DCEs) — between traditional Medicare beneficiaries and their medical-care providers. Like Medicare Advantage plans, DCEs — most of which are investor-owned with ties to commercial insurers — would receive a monthly payment for a specific group of patients.

As is the case with Medicare Advantage, the less money the plans spend on patient care, the more money they and their investors pocket.  But while Medicare Aadvantage insurers are required to spend 85 percent of their revenues on patient care, DCEs are allowed to keep up to 40 percent of the taxpayer dollars they receive as profit and overhead. (By contrast, traditional Medicare spends 98 percent of its budget on patient care.)

“Direct contracting is nothing more than privatizing Medicare,” charged Alex Lawson, Executive Director of the advocacy group Social Security Works. “It inserts a corporate bureaucrat between a patient and their doctor in order to deny care and make Wall Street money. The Biden administration must completely eliminate Direct Contracting — nothing less than that is acceptable.” (bolding mine – ed.)

Physicians for a National Health Program (PNHP) – one of the best lobbying groups for Medicare For All – added this to the conversation about DCEs in a letter to Secretary Xavier Becerra  of HHS:   

“We are a group of 24,000 physicians and other health professionals who are deeply concerned about a threat to Traditional Medicare (TM). The Direct Contracting (DC) pilot program, initiated under President Trump but continued under President Biden, is handing control of TM beneficiaries’ health care to third-party middlemen called Direct Contracting Entities (DCEs); DCEs include firms controlled by commercial insurers, for-profit hospital and dialysis chains, and private equity investors.


Recently, advocates and journalists have drawn attention to the conflicts of interest present at the program’s inception. DC was developed in 2019 by then CMMI director Adam Boehler, who, prior to joining CMMI, was founder and CEO of Landmark Health, which later won a DC contract2. After leaving the administration, Boehler was co-founder3 of Rubicon Partners, which is now partnering4 with physician practices to join DC or Medicare Advantage (MA) programs. During this time, HHS’s own Office of General Counsel warned5 that the DC draft program proposal referenced specific entities (Chen Med, Oak Street Health, Verily), raising serious ethical concerns that the program was established to benefit these companies. Several of the companies later won contracts6 to be DCEs.

Because of the industry influence during the program’s development, as well as the dangerous incentives for DCEs to earn greater profits by restricting patient care, we believe that superficial tweaks and cosmetic changes will not alter DC’s fundamental flaws. Below we address some of the industry’s suggested “refinements,” and explain why they won’t end this dangerous threat to Medicare.


From HMOs to Medicare Advantage to Direct Contracting, Medicare has been “experimenting” with managed care models for nearly 40 years. These models have never reduced spending or improved patient care. If middlemen in health care actually saved money and improved outcomes, the U.S. wouldn’t have the most expensive and ineffective health care system in the world. We don’t need to put seniors and people with disabilities through another failed experiment to prove this.

The DCE industry represents its own interests and that of its investors, and does not speak for physicians. As physicians, we urge you to end the dangerous DC program and work tirelessly to strengthen and protect Traditional Medicare, both for today and for generations to come.”

This must be made an issue in the upcoming election. Does your member of congress stand for Traditional Medicare or are they someone who will seek to privatize Medicare through use of underhanded methods such as DCEs. We know Mariannette Miller-Meeks seeks to privatize Medicare I believe Feenstra and Hinson want to also. 

A vote for any Republican in this election is a vote to end Medicare. If you are not on Medicare yourself, then most likely a close relative or friend is. Changes – including ending traditional Medicare – are in the hidden agenda of every Republican. They will be good only for corporations, not for those using the program.

Iowans need Christina Bohannan and Liz Mathis representing us, not a couple of corporate shills.

Medicare: What are DCEs And Why Should You Care?

Next Post

Medicare Payment Cuts Urged for Nursing Homes, Other Providers

A key advisory panel to Congress on Tuesday recommended increasing Medicare payment rates for acute care hospitals, long-term care hospitals, and outpatient dialysis facilities next year, while calling for a 5% pay cut for nursing homes, home health agencies, and inpatient rehabilitation facilities. The Medicare Payment Advisory Commission’s annual March […]