WHAT happens when DC’s deputy mayor for health and human services seems determined to steer parts of a multibillion-dollar contract to a specific company? The answer to that question has been playing out for months in the city, as the DC Contract Appeals Board (CAB) has ruled not once but twice against the executive’s handling of the Medicaid managed care contract. What’s more, last year the DC Council approved legislation to prevent the deliberate manipulation and violation of small-business laws, rules and regulations.
None of that has stopped Wayne Turnage, one of Mayor Muriel Bowser’s senior managers.
He appears to be scrambling for a solution to his myopic decision to shuffle more than 200,000 Medicaid patients between managed care providers in the midst of a public health emergency. That ill-timed move was exacerbated by a flawed execution of the procurement process that may have been motivated, at least in part, by his desire to exact revenge against Amerigroup — which, at the time, was an existing contractor.
Last week, Turnage appeared before the DC Council’s Committee on Health to push for passage of the Department of Health Care Finance Support Act — legislation crafted by the Bowser administration specifically to clean up Turnage’s mess. His testimony was replete with charts, graphs, exaggeration of the facts, and excessive bluster.
If the bill is approved, council members would seal their fate as scofflaw partners to the executive; last year they went along with Turnage’s decision to shift Medicaid recipients to new contractors, including CareFirst BlueCross BlueShield and MedStar Family Choice.
“One could say this could be an elaborate soap opera,” at-large Council member Christina Henderson said during the hearing. “But obviously, we have residents who are at the center of this.”
Turnage has cast himself as health care dictator. DC taxpayers have assumed the role of financiers. The Medicaid managed care contract is $1.5 billion annually. A Medicaid technology contract that has also been thrown into chaos is worth at least $100 million and rising, according to Turnage. Final costs for the cleanup are not yet known.
Small businesses like Norma Byrd’s could be affected. The Ward 4 resident said her company, Business Promotion Consultants Inc., has been in operation since 1981; located in Ward 3, it currently brings in about $3 million and has 39 employees. Byrd said passing the proposed legislation would “call into question whether the city is running a fair and equitable procurement process.”
“Yes, we need to make sure we’re delivering health care to everybody in the city,” continued Byrd. “But I don’t want the rules that this city — this good city — has put in place to help small businesses survive to be ignored.”
Linda Elam, plan president of Amerigroup, defended her company, noting that the CAB had “sustained” its protest “on three independent grounds.” She urged the council not to approve Turnage’s bill. She also reminded legislators that bidders for the managed care contract had been told to submit minority subcontracting plans with their proposal. MedStar didn’t.
Further, she said that contrary to Turnage’s comments, her organization had tried to work in partnership with MedStar, which declined to do so.
“Amerigroup remains fully committed to honoring all terms of the solicitation, including universal contracting,” added Elam, a former senior deputy director and state Medicaid director at the DC Department of Health Care Finance. Yes, she worked with Turnage, who used a few minutes of his time to slam her and the other public witnesses.
I have written about the managed care contracting debacle for the past several months. It is a classic example of government waste, abuse, mismanagement, and perhaps even fraud. Equally important, it lays bare the contracting and procurement challenges in the city; the Office of Contracting and Procurement (OCP) desperately needs rigorous council oversight and massive reform.
Truth be told, few things get fixed in the District government. Problems are covered over with management tricks; officials play word games or engage in plain, old-fashioned stonewalling.
Let’s go to the clips: Last summer, as the city was continuing to battle the coronavirus, Turnage and his team decided to move forward with a plan to change managed care organizations. That meant finalizing the multibillion-dollar contract and moving around hundreds of thousands of low-income Medicaid beneficiaries, including many immigrants. Behind the scenes, sources said, Turnage was manipulating things, even persuading one small business that was an existing MCO to sell to the larger CareFirst BlueCross BlueShield. It appears he also was massaging MedStar in hopes it would submit a proposal.
When the dust settled, proposals came from at least a half dozen companies, including AmeriHealth Caritas DC, CareFirst, MedStar and Amerigroup; the latter was among those not selected. Amerigroup subsequently filed a protest with the CAB. While the appeals board permitted the city to move forward while it considered the case, Turnage knew there was a chance it would ultimately rule against the District; he had been there before. Still, he decided to roll the dice, putting at risk the delivery of health care services to thousands of DC residents, many of whom were just the kind of people falling victim to COVID-19.
As expected, the CAB upheld Amerigroup’s protest, asserting the government had violated procurement laws and mandating a correction that required reevaluation of all proposals and prohibition of implementation of an option year, a standard in many District contracts. Interestingly, that Dec. 1 ruling came after the board had already shot down another Medicaid contract, upholding a protest by Conduent, a technology firm. In that case the Turnage procurement team had violated the law that requires contractors to provide a minority subcontracting plan at the time of submission.
Turnage and MedStar both asked the CAB to reconsider its ruling on the MCO contract. Last month the board rejected their request and reiterated its earlier order.
Now, Turnage is caught in a vise: “This is not a surefire panacea,” Henderson said of the potential legislative cure, adding that MedStar still would have to go through the scoring reevaluation.
Actually, the CAB ruling related to minority subcontracting might prevent the city from reevaluating MedStar’s managed care proposal at all. When the company initially submitted that document, it did not include the subcontracting plan as legally mandated.
“In the absence of legislative action, this confluence of events leaves DHCF with two options,” Turnage told council members as he pleaded to be rescued. “The first would be to accept Amerigroup into the program and move the members who had been reassigned to MedStar to this plan. Of course, this would require that MedStar’s [nearly] 65,000 enrollees be reassigned to Amerigroup, another health plan, yet again — and within 12 months of the previous transition.
“Such an action would be both unprecedented and highly disruptive to both Medicaid and [DC Health Care] Alliance members. Equally significant, many of these members now rely upon the MedStar Health System for their care,” he added.
Now he’s concerned about disruption to Medicaid recipients?
Turnage never conveyed to the council how many of MedStar’s current enrollees had been members of the Amerigroup plan. It could mean that some fraction of those 65,000 would simply be returned to home base.
Most council members had little sympathy for Turnage and his predicament. “It’s frustrating that we’re here,” Ward 1 Council member Brianne Nadeau said about the public hearing. “The whole point of having an independent contracting agency is that [council members] shouldn’t be involved at this stage. Now, we’re being asked to make a decision about something that shouldn’t have come to us.”
Council Chairman Pro Tempore Kenyan McDuffie, whose Committee on Business and Economic Development will be next in line to hold a hearing on Turnage’s legislative proposal, was lethal in his questioning of the executive. Later, he reiterated his position to me through an email statement. “The OCP and DHCF insisted on rebidding the Medicaid contract during the pandemic and disrupted healthcare services for some of our city’s most vulnerable residents. Now, they expect the Council to rubber-stamp the mayor’s bill which waives the law for a preferred contractor. They can’t have it both ways,” said McDuffie.
“Further, the mayor’s bill would not fix the OCP’s multiple violations of the solicitation terms, and the procurement law as decided by the CAB. The bill would, however, undermine the integrity of the District’s procurement process and harm local small businesses,” he added.
Last year was the worst time to shift Medicaid beneficiaries. This is the worst time to hurt small companies like those run by Byrd and Elam. The mayor should immediately cancel this Turnage soap opera and follow the law. Period. Full stop.
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