Council members, medical professionals and patients have all raised concerns about the proposal, which would place about 100,000 patients this fall onto new health-care plans, some of which do not cover the patients’ current doctors.
“There are questions that need to be answered by the Department of Health Care Finance about why they decided to essentially reallocate these patients during this global pandemic and this public health emergency. I think it’s questionable,” said Council member Kenyan R. McDuffie (D-Ward 5), who called for the meeting amid the council’s August recess.
The three contracts, totaling $1.5 billion, are together one of the biggest outlays of money by the D.C. government and one of the most contentious, as health-care companies jostle for a share of the funds.
Right now, most of the city’s nearly 250,000 Medicaid recipients are covered by what’s known as a “managed care organization,” in which the city pays a set rate — based on a person’s health conditions — to a private health-care company and the company acts as the patient’s insurer. Historically, the city assigned patients to companies in batches — the highest-risk patients covered by one company, moderate-risk patients covered by a second and low-risk patients covered by a third.
About 22 percent of Medicaid patients, including many with complex health needs, are on a “fee-for-service” plan instead of managed care. They simply go to the doctor and the District pays. According to a Health Care Finance presentation, these 22 percent of patients account for 53 percent of the District’s Medicaid spending — more than $24,000 per person annually, compared with $6,000 per person on managed care.
Under the new contracts, the District would phase out fee-for-service, eventually putting every patient — except a small number who live in long-term care facilities — on a managed-care plan. For 19,000 patients, that change would take effect Oct. 1, the Health Care Finance agency said in a meeting with Medicaid participants this week.
“You’ll have access to care managers who will help to develop an individualized care plan that is person-centered, that will help you to work through or maneuver through the health-care system, and gain access to all of the necessary services that you need to enhance or improve your health care,” Lisa Truitt, who led the meeting, told attendees. “The overall goal is to improve the overall care of our customers.”
Nationally, more than two-thirds of Medicaid recipients are covered by managed-care plans, according to data from the Kaiser Family Foundation. The District plans to join Hawaii, Kansas, Nebraska, Tennessee and Virginia as one of the few jurisdictions that use managed care for at least 98 percent of their Medicaid patients.
The new contracts replace Amerigroup with MedStar, and instead of splitting patients by risk level, they randomly distribute about 70,000 patients to each of the three companies.
MedStar lost the District’s business in 2017, after Wayne Turnage, deputy mayor for health and human services, castigated the company for its performance. In a presentation to the council, Turnage said that despite having moderate-risk patients on its plan, MedStar spent significantly more than AmeriHealth spent insuring the highest risk patients — $404 per person, per month, compared with $358. Turnage said MedStar’s patients also ended up in the hospital more often than those on other plans.
Another major complaint against MedStar was that it wouldn’t arrange a contract with the other two insurers, AmeriHealth and Trusted, to allow their Medicaid patients to see doctors or use the two hospitals that MedStar operates, Georgetown University Hospital and Washington Hospital Center.
While MedStar was not running a managed-care plan for the past two years, Turnage said their hospital and specialists contracted with AmeriHealth, not Trusted and Amerigroup — leading flocks of patients to switch to the AmeriHealth plan so they could visit MedStar doctors. The other two plans were left, unexpectedly, with fewer patients to cover, especially when it came to higher-risk patients.
Continuing that imbalance “would have pushed the program toward insolvency,” Turnage said. Because Amerigroup lost most of its sicker patients, he added, the company ending up making huge profits — at the city’s expense.
Amerigroup “made a 30 percent margin on a public health plan. That’s unheard of,” Turnage said. “In 18 months, Amerigroup, through no fault of their own — they lost their sick patients — made over $80 million on the Medicaid program.”
Turnage contends that the new contracts fix that problem because they require all Federally Qualified Health Centers in the District — including nonprofits like Unity Health Care and Mary’s Center that already treat many Medicaid patients — to take any of the managed-care plans. All hospitals must as well.
Council members expressed concern that the hospital agreement rests on the District’s threat that it won’t send any fee-for-service patients to a hospital unless the hospital accepts all managed-care patients. Because the city plans to phase out fee-for-service within five years, that incentive will diminish.
Turnage said at least 3,000 patients, most of them with severe disabilities and thus lucrative to hospitals, will remain on fee-for-service, and the hospitals will want their business. And MedStar’s new contract to provide managed care will specifically require that its hospital be open to all Medicaid patients.
But the contract will bring change. Private medical offices have no rules about which insurers they must accept, which could mean patients who get reassigned to a different insurer this fall would be unable to go to their current doctors.
That worries people like Jason Henderson, whose D.C.-based company provides in-home health services including physical therapy, speech therapy and nursing care, mostly for poor patients in Northeast and Southeast Washington. He said 75 percent of his patients are covered by Amerigroup, the plan that won’t be included in the new contracts. Others are fee-for-service patients who might be assigned to a managed-care insurer.
If Henderson’s company can’t work out a contract with his patients’ new insurers, it could wipe out his business. He said he fears that MedStar will prefer to send its own in-home health providers rather than contracting with his business.
Patients who don’t like their random assignment to an insurer will be allowed to request a switch until the end of the year. Ambrose Lane Jr., chair of the Ward 7 Health Alliance Network, said he is trying to inform patients of that right, and hearing from many who are concerned.
“Once people get familiar with their doctor and they like their doctor, it’s kind of hard to switch to another doctor. It causes a certain amount of anxiety and upheaval,” he said. “If they switch me, I’m switching back the first day.”
But Turnage said he thinks few patients will find the switch to be a disruption, since most get their primary care from the Federally Qualified Health Centers.
The council has until Sept. 3 to vote to block the contracts, which would force the city to return to negotiating. It would be unusual for the council to take such a step. To do so, the council would have to formally end its summer recess.
McDuffie, who chairs the council’s committee on business and economic development, said he wants Thursday’s meeting to also examine whether the procurement process that led to these contracts followed the city’s rules on giving extra weight to local minority- and women-owned small businesses.
He noted that Trusted, a qualifying minority-owned D.C. business, was acquired by the larger company CareFirst, and questioned whether CareFirst was inappropriately treated during the negotiations as a local small business. McDuffie said he has not been able to learn from the city whether any other local minority- or women-owned business bid on the contract.
Turnage told The Washington Post he would send McDuffie documentation of what he described as an “exhaustive” process to evaluate CareFirst’s bid.
“It is very clear to me that all of the rules and law were followed in the execution of this procurement,” he said.
McDuffie said he would have more questions when Turnage and others testify before the council on Thursday.
“I think during a time when we’re seeing small businesses across the District of Columbia closing their doors during this pandemic,” he said, “we should make sure that a contract worth $1.5 billion is one where small businesses receive a fair shot at competing.”
Lola Fadulu contributed to this report.