D.C. plans to rebid its troubled Medicaid contracts, as risk of patients losing access to MedStar doctors looms

MM Curator summary


One hospital-based health plan lost its DC contract and has threatened to not see Medicaid patients- and that has triggered a new MCO procurement.


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As a crisis roils D.C.’s Medicaid system, city leaders said on Friday that they will issue an entirely new procurement for insurance companies to manage poor patients’ care — an attempt that may or may not prevent MedStar from revoking access to its doctors for hundreds of thousands of poor patients.

The city’s Medicaid troubles reached a boiling point last week when Deputy Mayor Wayne Turnage said that MedStar, the hospital system that most often cares for D.C.’s beneficiaries, had announced its intention to stop providing routine care for most Medicaid patients in the coming months.

The new plan to rebid the contracts might represent one step toward resolving the impasse with MedStar, though a new procurement does not necessarily mean that low-income patients won’t face the loss of their current insurance plan or their access to some doctors this fall.


D.C. Medicaid patients could lose access to MedStar, the health system that most often treats the city’s poor and sick


The situation developed after a judge last year ruled that the city had improperly awarded the contracts, collectively worth about $1.5 billion, to three insurance companies to manage the care of 250,000 Medicaid beneficiaries and participants in the Alliance program for other low-income patients. The judge said MedStar, which operates both a hospital system and an insurance plan, had not followed procurement rules and shouldn’t have been awarded one of the contracts.

Under the ruling, MedStar is set to lose its contract at the end of September. With that date approaching, according to Turnage, MedStar told the other two insurers — who under the ruling were set to keep their contracts — that starting later this fall, it will no longer treat their Medicaid patients at its hospitals and doctors offices, except for emergency room visits, unless the insurers start paying much higher rates.


That set off a scramble last week by D.C. officials to prevent hundreds of thousands of patients from losing access to MedStar doctors. Friday’s announcement was the first step.


D.C. Council won’t take action that could allow MedStar to keep its Medicaid contract


Turnage said that the Department of Health Care Finance, which he heads, decided to now require Medicaid managed care plans to cover intensive inpatient mental health and substance abuse treatment programs that are currently paid for directly by the District, not by the insurance plans. This change in the managed care program will require the city to rebid the contracts, Turnage contends. That would have the secondary effect of eventually allowing MedStar another chance to win the contract, after the department issues its new request for proposals in November.


All three insurers who currently hold the contracts have either declined to comment or not responded to inquiries from The Washington Post. They would all need to bid again to stay in the program.

Turnage’s action Friday could give the appearance that the city found an excuse to redo the procurement just so that it could give MedStar a contract again — and thus satisfy the company so that it won’t revoke access to its doctors in the meantime. As the mayor and council have fought over the Medicaid situation for months, accusations of “contract steering” have flown back and forth. Council members have voted down Mayor Muriel E. Bowser and Turnage’s proposals that they viewed as unfairly crafted to make room for MedStar in the program, and Turnage said council members who tried to require the city to abide by the judge’s order were assisting Amerigroup, which could have replaced MedStar as the third insurer.


Turnage said he was not promising any business to MedStar, but acknowledged the timing of the decision could potentially help the District out of its current quandary. “Obviously if we have a chance to both modify the program to bring in new benefits and also take some actions to ensure there’s no disruptions, we take advantage of that propitious timing,” he said. “This is going to be a competitive procurement. There will be many comers, and nobody’s going to be guaranteed a spot.”


In the meantime, two major disruptions loom: First, when MedStar’s contract as an insurer ends in a month, the nearly 60,000 patients covered by the plan would be reassigned to either CareFirst or AmeriHealth. The three insurers all have contracts with the city’s major hospitals and clinics, but the change could still be a headache for some patients.


Turnage said that Bowser is studying that issue. Unless Bowser takes action to stop MedStar’s contract from ending — a power she may have under her coronavirus pandemic emergency authority — notifications are scheduled to go out to those patients about their new insurance coverage starting Wednesday.


And second, long before the new procurement is complete, CareFirst and AmeriHealth patients will lose access to MedStar doctors unless the insurers can broker some sort of agreement.


That’s what scares one Ward 7 resident, who spoke on the condition of anonymity to keep her health conditions private. The resident, a 50-year-old woman, is a longtime Medicaid patient who has lost access to her primary care provider in the past due to the fluctuating agreements between hospital systems and Medicaid managed care providers.


That time, it took her two years to find another primary care doctor, she said. The asthma that her old doctor had helped her control worsened, and she became prediabetic before she found a nonprofit clinic where she could get medical care.


Now, she is enrolled in AmeriHealth’s managed care plan and is seeing a cardiologist and a pulmonologist at MedStar. She fears she’ll lose access to her doctors once again.


“We don’t get to say anything. Because we’re poor, we don’t get no say, and it’s not fair,” she said. “They’re always talking about health disparities. How can we address them if we aren’t going to the doctor?”


Clipped from: https://www.washingtonpost.com/dc-md-va/2021/08/27/dc-to-rebid-medicaid-contracts/