DC’s Medicaid managed care mess ad nauseam

MM Curator summary

[MM Curator Summary]: Seems the hot mess of DC managed care procurements never did get cleared-up- we just stopped hearing about it. But new deadlines around fixing the awards are coming up.


The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


Mayor Muriel Bowser and members of her team, including Deputy Mayor for Health and Human Services Wayne Turnage, appear to be misdirecting the city’s procurement process — yet again. Equally troubling, they are preparing to squeeze the DC Council, potentially forcing legislators to extend, for a second time, the multibillion-dollar Medicaid managed care organization (MCO) contract awarded in 2020 to AmeriHealth Caritas DC Inc., MedStar Family Choice and CareFirst BlueCross BlueShield Community Health Plan.

“This mayor is going to drive Medicaid off a cliff,” said one source knowledgeable about these new shenanigans in which the Bowser administration is engaged.


(Photo by Kate Oczypok)

The initial awards to CareFirst and MedStar were controversial at the time. The former received points reserved for certified minority business enterprises, although there were questions about whether it should have been given that advantage. The latter scored lower than the fourth bidder — Amerigroup DC, which filed a series of complaints with the DC Contract Appeals Board (CAB).

In December 2020, the CAB ruled in Amerigroup’s favor, requiring the city to reevaluate all the contracts. For the next nine months, Bowser and Turnage brazenly circumvented the CAB; they ultimately engaged in a shady, unethical maneuver that steered the contract to MedStar while denying Amerigroup an award it had won playing by rules the mayor and her team repeatedly broke.

By the fall of 2021, with talk that MedStar could lose its contract, the health care giant threatened to terminate its agreements to provide services to the patients of other MCOs. DC’s Medicaid program was indeed going off the cliff. 

Three council members — Council Chair Phil Mendelson, Ward 7 member Vincent Gray and at-large member Robert White — pushed consideration of the Contracts With Managed Care Organizations for the Provision of Health Care Services to District Residents Emergency Approval and Authorization Act of 2021. They said they backed the extension because they worried that failing to act would put at risk the health care of more than 250,000 low- and moderate-income residents.

After securing that first extension in October 2021, Bowser was supposed to finalize and award a new contract within nine months. The council expected to receive that new five-year $8 billion procurement by June 28.

That didn’t happen because she and her team bungled the procurement — not once but twice — resulting in multiple protests being filed with the CAB.

Mendelson did not reply to several emails sent to his office requesting a comment about the mayor’s failure to follow her agreement with the council. If he doesn’t stop the executive this time around, he will underscore the perception of him as a feckless leader.

White said in an email to me that he is “incredibly frustrated that the Mayor neglected to send the Medicaid managed care organization contracts down to the Council last month and that, despite earlier signs of improvement, there continue to be problems with the District’s largest procurements.”

As chair of the Committee on Government Operations and Facilities, White has oversight of the Office of Contracting and Procurement (OCP).

“I’m dismayed that, once again, the healthcare of District residents with low incomes may be put at risk by the failure of this contracting process. My committee is actively seeking an explanation from the [OCP] about why they missed the deadline — which was set by the Council last fall — for approval of these contracts,” added White. 

Based on his conversations with individuals in the mayor’s office, Ambrose I. Lane Jr. — head of Health Alliance Network, one of DC’s largest citizen-led health advocacy groups — seemed prepared to give the mayor considerable leeway. “It sounds reasonable that they are going to wait for the CAB,” he told me in a telephone interview.

“My biggest concern is stability. Having [this second] extension will provide some of that,” continued Lane, though he acknowledged that such stability would be temporary and that eventually there will be “turnover whether in October or January.”

And that is the major issue. Medicaid patients have been shifted between MCOs and providers  as many as three times in the past five years, causing not just confusion but also fluctuation in the quality of care, according to government sources.

Lane said this could be an opportunity for the District, especially with upcoming changes atop the DC Department of Health, where Dr. LaQuandra Nesbitt is leaving at the end of July after more than seven years as the agency’s director. The city could treat chronic diseases in a different way. “It could be an opportunity to have a more community-focused approach to addressing health issues,” Lane said.

Perhaps he is an acolyte of the keep-hope-alive movement. I have not seen any indication the mayor and her minions are interested in any collaboration between Medicaid recipients and the administration.

When I sent an email to Turnage asking him to explain what happened, he referred me to the Office of Contracting and Procurement. Sisy Garcia, the agency’s public information officer, partially repeated what I wrote earlier this year: The city issued two requests for proposals (RFPs) that were nearly identical. The second was intended to clean up problems that developed with the first.

Help us! It may be difficult to prove fraud, but abuse and waste are easily identifiable.

The first solicitation went out on Nov. 19, 2021. There were four bidders. Three of them — MedStar, CareFirst and Amerigroup — were essentially disqualified. The process was so severely flawed that all three of them filed protests with the CAB. Then, on Feb. 2, the city issued the second RFP; notably, DC officials failed to allow bidders to make corrections to documents filed in the earlier solicitation, although the errors appear to have been caused by faulty information from the DC Department of Small and Local Business Development. In effect, there were two concurrently active RFPs covering the same work — an unusual, and somewhat sketchy, scenario.

“Both solicitations have since closed, and the evaluation of submitted proposals is underway,” Garcia wrote in her July 5 email to me. 

In that same correspondence, she seemed to contradict herself: “OCP has completed the procurement process and identified the anticipated awardees,” said Garcia. 

But, she added, the city has to wait for a ruling on three outstanding protests: one from MedStar and two filed by CareFirst. “OCP will complete the award process once these protests are resolved.”

While those three cases remain open, others have been decided. On May 12 the CAB denied an initial challenge from CareFirst. On June 2, it rejected a complaint from MedStar. On June 3, the CAB upheld Amerigroup’s assertion that the city should not have rejected its response to the RFP.

By mid-June, the OCP told AmeriHealth Caritas and Amerigroup that they would be awarded the contract based on the first solicitation. MedStar also received preliminary notice that it was selected based on its proposal from the second RFP. 

CareFirst was out of the game completely. Executives from the company took their concerns directly to the mayor, according to government sources. It’s worth mentioning that former DC Council member David Catania, who runs his own consulting firm, has lobbied both the mayor and some of his former colleagues on behalf of CareFirst.

One more thing: CareFirst recently settled a lawsuit filed 12 years ago by DC Appleseed Center for Law and Justice over CareFirst’s hoarding of excess surplus revenues. As a nonprofit organization, CareFirst is limited as to how much it can keep lying around. CareFirst agreed to pay $95 million to the District; that money is being used to create a Health Equity Fund, with the initial round of grant applications now being accepted by the Greater Washington Community Foundation. 

Perhaps CareFirst believed that forking over that kind of money should have given it leverage. It could only reach that conclusion if it completely ignored the fact that its payout wasn’t voluntary but rather the result of dogged legal work by Walter Smith and his team of pro bono lawyers.

Even though the CAB has yet to rule on two outstanding complaints by CareFirst, the company last month filed an appeal with the DC Superior Court challenging the CAB’s initial denial. Courtney Mims, a spokesperson for CareFirst, twice promised to provide a statement. She never sent it, instead ultimately providing a message of “no comment” and a link to publicly available court documents.

In the June 13 court filing, CareFirst argued that its proposal was rejected for two clerical errors related to its subcontracting plan — specifically, it included a subcontractor that is not a certified business enterprise, and mixed up the certification number for another subcontractor. CareFirst asserted that the District “unreasonably failed to exercise its discretion under DC regulations to remedy the clerical error.”  

CareFirst also argued in its court filing that the dual solicitations created “an arbitrary procurement process” that precluded head-to-head competition, which it called “the bedrock principle of full, fair, open public procurement.”

It is unclear whether the CAB will rule on the substance of one of CareFirst’s unresolved protests since the DC Office of the Attorney General, representing the city, has claimed among other things that the company lacks standing. However, the appeal filed in DC Superior Court is on the docket for Sept. 16. 

Bowser could ask the CAB to allow her administration to move forward with awarding the contract to ensure Medicaid patients are not injured by any delay. She has not made that request, however. 

Could it be that making such a move would have her pushing against powerful political allies in an election season?

“We need to understand whether these delays are truly necessary and if a decision in the outstanding protests would have an impact on which companies receive the contracts,” White wrote in his email. 

“I am exploring other options including additional oversight hearings or legislation if needed,” he continued. “We must remain vigilant to ensure this process isn’t abused in order to exert influence over who receives the contracts.”

If White wants to get serious about all of this, he may want to ask for subpoena powers when he conducts his next oversight hearing. That may be the only way to stop the city’s Medicaid mess from continuing ad nauseam.

jonetta rose barras is an author and freelance journalist, covering national and local issues including politics, childhood trauma, public education, economic development and urban public policies. She can be reached at thebarrasreport@gmail.com.


Clipped from: https://thedcline.org/2022/07/11/jonetta-rose-barras-dcs-medicaid-managed-care-mess-ad-nauseam/