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How Trump Promoted A Multi-Billion Dollar Medicare Fraud

One of the largest Medicare fraud schemes in program history began to unravel several years ago when accountable care organizations created under the Affordable Care Act began noticing most of their savings, which they share with taxpayers, were vanishing due to the exorbitant cost of a single product — wound care bandages made mostly from dried placenta cells.

By April 2024, the National Association of Accountable Care Organizations (NAACOS) had enough data to notify the Centers for Medicare and Medicaid Services (CMS) about the outlandish sums being paid to physicians using “skin substitute” bandages for wound care instead of traditional bandages. The physicians, who purchased the skin substitutes at a steep discount from manufacturers, were billing ACOs at the list price and pocketing the difference.

Some patients were racking up millions of dollars for the skin substitutes used to cover their diabetic sores and other hard-to-heal wounds. According to a letter NAACOS sent to a Medicare payment contractor in June 2024, “the skin substitutes have been provided to patients who are poor candidates for specialty wound care, including hospice patients receiving significant wound care in the last three days of life, patients with inability to off-load pressure or transport without force, and patients who are unable to maintain adequate nutrition.”

This lucrative scheme for physicians was providing even larger profits for their manufacturers, almost all of which are privately-owned. Using loopholes in the law, they began charging an average of more than $6,000 per square inch for skin substitute bandages. Some products reaching over $21,000, according to a New York Times investigation in April.

Five years ago, the highest priced skin substitute bandages on the market was only $1,045 per square inch. Medicare spending on skin substitute bandages soared from about $250 million in 2019 to more than $10 billion in 2024, according to CMS.

The Biden rule

After NAACOS alerted CMS to the alleged fraud, the Biden administration began crafting a new rule that would sharply lower the maximum price paid the firms selling the expensive bandages. It also limited payments to physicians who used skin substitute bandages purchased from firms that had generated medical evidence showing they improved wound care better than much cheaper standard bandages. Many firms in the field produce no such studies since the bandages do not require FDA approval beyond meeting sterility standards. The rule was slated to go into effect this past February.

That when the Trump regime sprang into action. The rule was delayed until April 13 as part of its blanket regulatory freeze. Then, in March, Trump issued a post on his Truth Social site claiming: “‘Crooked Joe’ rammed through a policy that would create more suffering and death for diabetic patients on Medicare” — an echo of the industry’s false claims.

How did Trump know anything about an issue that at that point still had not appeared on the mainstream media’s radar screen? Last fall, when the Biden rule was in the works, San Antonio-based Extremity Care, one of the largest firms in the skin substitute field, donated $2 million to MAGA Inc., the super PAC supporting Trump’s election campaign. In February, according to post this week by journalist Judd Legum on the substack Popular Information, Extremity Care donated another $5 million to MAGA Inc.

In April, the day after publication of the Times exposé, Dr. Mehmet Oz's CMS postponed enactment of the new rule until 2026. This allowed companies to continue selling at high prices for at least another eight months.

Then, three weeks ago, the Trump regime reversed field and included a price limit for skin substitutes in the physician payment rule for 2026. The proposal sets a maximum price of $806 per square inch. “We’re making it easier for seniors to access preventive services, incentivizing health care providers to deliver real results and cracking down on abuse that drives up costs,” Oz said in a statement.

What Texans do when they’re not gerrymandering

However, nothing the Trump regime says should be taken at face value. As Legum reported, the new rule does not limit limit coverage to products that are scientifically proven to be effective. Moreover, the $806 price is higher than what many reputable firms in the industry charge.

The two biggest abusers of the loopholes in the law are based in Texas: Extreme Care and Ft. Worth-based Legacy Medical Products. Both are privately held and neither has tested their products against traditional bandages to determine if they generate superior outcomes.

And they’re not done fighting. They’ve formed the Mass Coalition to fight the new rule. They’ve also paid $320,000 a year to Brian Ballard, a Trump fundraiser who is widely regarded as the lobbyist with the most influence with the Trump administration, according to Legum. Susie Wiles, who is Trump's chief of staff, worked for Ballard. Many of the early commenters on the proposed rule are using identical cut-and-paste letters to protest the proposal, the kind of ginned up outrage that inside-the-Beltway lobbyists are expert at generating.

ACO-employed clinicians are worried that even this limited rule will be deep-sixed by the transactional Trump regime. In its July story announcing the rule’s reintroduction, the Times quoted Alex Binder, the vice president of the Parker Advanced Care Institute, a nonprofit medical practice belong to an ACO that treats older patients with chronic or terminal illnesses in New Jersey.

“There has been pushback in the past,” Binder said. “Will there be pushback again?”

Reprinted with permission from Gooz News.

Republicans Beware! Medicaid Is Not A Soft Target

Does anyone remember the 1995 government shutdown and why it happened? Basically Newt Gingrich, fresh off a big Republican victory in the midterm election, was trying to force Bill Clinton to make big cuts in Medicare. He failed, in large part because Medicare was and is an immensely popular program.

A decade later, George W. Bush tried to privatize Social Security. But he, too, failed, because Social Security is also immensely popular.

But the Republican quest to rip up as much of the social safety net as possible never ends. And for the past 15 years or so that has meant steering clear, for now, of Medicare and Social Security, which are middle-class programs, and going after Medicaid instead. If the One Big Beautiful Bill Act — which is, incredibly, the legislation’s actual name — goes into effect, Medicaid will be cut by around a trillion dollars over the next decade. (As of this morning, the fate of that bill remains uncertain.)

What is Medicaid? Like Medicare, it’s government-provided health insurance. But unlike Medicare, it’s “means-tested”: your income has to fall below a certain level before you’re eligible. This makes Medicaid a program for the poor or near-poor — and that, for many on the right, suggests a political opportunity.

Ostensibly, the right attacks Medicaid because it costs too much. I mean, it’s a government program, which means that it must be riddled with waste, fraud, and abuse, right? And surely there must be millions of lazy people getting health care through Medicaid who should be getting up off their couches and going to work.

The reality is that none of this is true.

No doubt there’s waste and fraud in Medicaid, as there is in any system created and run by human beings. But overall Medicaid provides essential health care relatively cheaply. Once you adjust for the generally poor health of the average Medicaid recipient — chronic illness can make you poor! — Medicaid appears to have significantly lower costs than private insurance:

Actually, in some ways Medicaid resembles the health care systems of other advanced countries, which are much cheaper than U.S. health care (while achieving equally good results) largely because they’re more cost-conscious, willing to bargain hard with drug companies, say no to expensive procedures of dubious medical benefit, and so on.

Meanwhile, the vast majority of Medicaid recipients either are working or can’t work — they’re disabled or need to stay home to care for others:

Oh, and one thing we know from repeated experience is that adding work requirements to Medicaid does not, in fact, lead to more people working.

I don’t know how many of the right-wingers clamoring for drastic Medicaid cuts believe the stories they tell about waste and lazy Americans who won’t get a job. My guess, though, is that they don’t care whether these stories are true. They’re going after Medicaid because they see it as a soft target — a program that helps lower-income Americans, and who cares about them? Medicaid’s beneficiaries, they imagine, are the new welfare queens driving Cadillacs.

But a funny thing has happened to public opinion about Medicaid. The share of Americans covered by the program has increased a lot over the past 15 years:

And the fact that so many Americans now receive Medicaid means that many people have either benefited from the program or know people who have. And as a result the program has become remarkably popular:

83 percent favorability — 74 percent among Republicans! — is incredibly high. In fact, Medicaid appears to have slightly higher favorability than apple pie.

What this suggests is that Republicans who consider Medicaid a soft target, a program that only benefits inner-city rats, are going to be shocked by the blowback if they do manage to eviscerate this key piece of American health care.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times.

Reprinted with permission from Substack.

Johnson Privately Confirms Deep Medicaid Cuts He Denied On Fox News

Twenty-four hours after House Speaker Mike Johnson (R-LA) used Fox News’ platform to claim Democrats are lying when they say that the GOP’s One Big Beautiful Bill cuts Medicaid, Politico reported that he is privately warning House Republicans will lose their majority if the Senate version’s Medicaid cuts are enacted.

Fox & Friends co-host Ainsley Earhardt asked Johnson during a Tuesday interview to explain the differences between the House and Senate versions of the legislation on “Medicaid and the SALT deductions and other areas,” and to respond to Democrats “that are pushing this narrative that's not true that Republicans are cutting Medicare and Medicaid.”

Johnson responded that the Democratic claims are “nonsense” because “we are not cutting Medicaid” but instead “strengthening the program for the people that desperately need it and deserve it” by instituting work requirements. He said Democratic ads saying otherwise had been “taken down.” He did not address the part of the question about how the House and Senate Medicaid provisions differ — though he did go on to warn Senate Republicans they would be “playing with fire” if they touch the House bill’s boost to the cap of the State And Local Tax deduction.

But when Johnson talks to Republican power players instead of Fox viewers, he is saying something very different, Politico reported on Wednesday:

Speaker Mike Johnson is warning in private that Senate Republicans could cost House Republicans their majority next year if they try to push through the deep Medicaid cuts in the current Senate version, according to three people granted anonymity to describe the matter.

That comes as Sen. Thom Tillis (R-N.C.) cautions GOP senators that those same cutbacks could become a political albatross for Republicans just as the Affordable Care Act was for Democrats.

“[Barack] Obama said … ‘if you like your health care you can keep it, if you like your doctor we can keep it,’ and yet we had several million people lose their health care,” the in-cycle senator told reporters Tuesday. “Here we’re saying [with] Medicaid, we’re going to hold people harmless, but we’re estimating” millions of people could lose coverage.

While the Senate’s proposed cuts are even steeper, the House bill, contrary to what Earhardt and Johnson suggested to Fox’s audience, also includes devastating Medicaid cuts. It would drive nearly 8 million people off the Medicaid rolls over the next decade, the Congressional Budget Office found. Analysts say those cuts, along with other health cuts in the bill, would result in more than 11,000 medically preventable deaths annually and could force rural hospitals to close.

These Medicaid cuts are hideously unpopular, but Fox figures are helping Johnson keep his speakership by downplaying their impact to viewers — when they talk about them at all. Indeed, Fox & Friends did not address the Medicaid cuts on Wednesday, including after Politico’s report contradicted Johnson’s claims to their viewers.

Meanwhile, though Johnson told Earnhardt that Democratic claims about the GOP’s Medicaid cuts were so obviously false that ads on them have been taken down, an ad denouncing Rep. Don Bacon (R-NE) for having “voted for the biggest Medicaid cut in history” has run more than 100 times on TV stations in his district this week, according to a Media Matters review of the Kinetiq database.

Reprinted with permission from Media Matters.

How Trump's 'Big Beautiful' Medicare Cuts May Harm Your Health Care

I’m no defender of the cruel and unusual punishment inflicted on the American people by the House Republicans’ “One Big Beautiful Bill” passed late Tuesday night. And it’s important to understand that Medicare as well as Medicaid will take a major hit, nearly $500 billion in cuts over the next decade, according to the Congressional Budget Office.

But the political impact will be far less than the cuts to Medicaid, food stamps, reproductive health, environmental and other program contained in the bill. That’s why I’m interrupting my travels this morning to offer this explainer because how defenders of Medicare and Medicaid talk about these Medicare cuts matters.

Under the bill, Medicare will be subjected to sequestration under the 1997 Balanced Budget Act. Sequestration is an across-the-board cut in government programs that Congress can impose if a spending bill increases the deficit.

Not all programs are affected. Medicaid, Pell Grants, and Social Security benefits are exempt. Medicare, Head Start, housing assistance, public safety grants, and transportation, among many, are not. In theory, defense spending should also be cut, but it was increased under this bill.

CBO estimates this bill’s limited sequestration will impose a four percent across-the-board cut in Medicare funding. This would include payments to both providers (boo!!) and Medicare Advantage plans sold by insurers (yay!!). Since MA plans now cover over 51 percent of seniors and are paid somewhere between 8-20 percent more on average per beneficiary than traditional Medicare, insurers will get hit with most of the cuts.

Now, if this were targeted just at MA plans along with new requirements on how they spent the money (like raising the mandatory medical loss ratio to 90 percent from 85 percent), and the money saved was targeted to preserve Medicaid as it now is (the $500 billion would cover most of the proposed cuts to that program), I might be cheering this aspect of the bill.

But as it stands, this is how MA plans and providers in traditional Medicare will likely respond to sequestration should it make it into the final bill:

They will reduce access. MA insurers will impose more stringent prior authorization rules, increase claims denials, and impose reductions on the amounts they pay hospitals, doctors and other providers;
Physician practices will impose limits on patient access for non-essential and less remunerative services like wellness visits and preventive care. Private equity, insurer and some hospital-owned physician practices will speed up the treadmill that already has a typical office visit down to 13 minutes or less;
Fewer doctors in many areas of the country will accept new Medicare patients, resulting in longer wait times and more difficulty finding providers, especially specialists; and
Some of those extra benefits in MA plans will disappear or be made more difficult to use. Many plans may impose higher out-of-pocket costs; and
The cuts will be especially damaging in rural areas already suffering from hospital closures and physician shortages. Seniors and the disabled will have to travel farther for care.

CBO estimated Congress could save nearly $1 trillion over the next decade by simply cutting MA plan payments down to the same amount providers would have received had their beneficiaries remained in traditional Medicare. Instead, they crafted a sequestration that will make it harder and more expensive for seniors and the disabled to access care.

It is the ways that will affect beneficiaries is what the general public needs to hear about as the bill now moves to the Senate — not the top line dollar number for the cuts.

Reprinted with permission from Gooz News.

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Smart. Sharp. Funny. Fearless

How Trump Promoted A Multi-Billion Dollar Medicare Fraud

The Biden rule

What Texans do when they’re not gerrymandering

Republicans Beware! Medicaid Is Not A Soft Target

Johnson Privately Confirms Deep Medicaid Cuts He Denied On Fox News

How Trump's 'Big Beautiful' Medicare Cuts May Harm Your Health Care

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