IF YOU DON’T WIN A DC CONTRACT, START A CITIZEN PROTEST
THAT surely must be the thinking of leaders at CareFirst BlueCross BlueShield Community Health Plan and their lobbyist Georgetown Public Affairs. CareFirst is desperately trying to hold onto the company’s portion of the District of Columbia’s $1.5 billion Medicaid Managed Care Organization contract. It was knocked out of the running when it wasn’t selected from either of two requests for proposals--one circulated in November 2021; the other in February.
There are indications that AmeriHealth Caritas of the District of Columbia, MedStar Family Choice and Amerigroup DC have been temporarily selected to receive the new $8 billion, five-year MCO contract. The new contracts could be sent to the DC Council for its approval or disapproval this month. They likely won't take effect until January, however.
The DC Council had extended the previous MCO contracts with AmeriHealth, MedStar and CareFirst through Sept. 30th. On Sept. 15th Mayor Muriel Bowser forwarded to the legislature three emergency bills that essentially were sole source contracts for the same three companies in the total amount of $431,491,550.68.
Interestingly, TBR interviewed council Chairman Phil Mendelson four days later on September 19. He made no mention of the transmission from the mayor. He said that there wasn’t any reason that the mayor could not send a request to extend the existing contracts and include the new contracts for AmeriHealth, MedStar and Amerigroup.
“The [city administrator] was expecting to submit the contracts with an extension on October 4,” Mendelson said during a telephone interview.
That won't happen, especially since Mendelson and other council members allowed the sole source contracts to be deemed approved on Sept 30. Those contracts will be in effect until Dec. 29, 2022.
Nothing appears to be preventing the executive from moving forward with the new contracts, especially since the multiple complaints filed by CareFirst with the DC Contract Appeals Board have been dismissed. CareFirst still has a lawsuit in DC Superior Court, requesting that the initial denial be reviewed by a judge. An appearance in that court case is expected this month.
Not leaving anything to chance, the health company’s lobbyist, Georgetown Public Affairs LLC, founded by former DC Council member David Catania, has launched a scathing campaign that has appeared on the Washington Post and other news sites; it also has been running on selected radio stations and social media platforms. Tell D.C. Leaders: Keep CareFirst in D.C.! urges residents to contact every council member and the city’s Chief Procurement Officer George Schutter to complain that CareFirst may not be among the chosen contractors.
In an email sent to TBR on September 13, At-large council member Robert White, whose committee oversees contracting and procurement, raised concerns about Georgetown Public Affairs’ efforts. “[The] priority is to make sure MCO procurement, and all DC procurements, happen through the proper legal process.
“The District has procurement laws for a reason: to insulate the process from outside influences and ensure contracts are awarded objectively,” White continued. “The Council should be making our decision on MCOs without regard to public or private lobbying."
Lawrence S. Sher, a lawyer with Reed Smith LLP, who represents AmeriGroup DC, sent a “cease and desist” letter to Catania on September 16, accusing him of making “improper communications during the ongoing procurement and at the same time that your client CareFirst has filed two bid protests (challenging putative awards of the MCO contracts), which remain pending and undecided before the DC Contract Appeals Board,” Sher wrote in his letter, a copy of which was sent to all council members. TBR managed to get a copy of one of those copies.
“As you should be aware, based on your prior service as a member of the District of Columbia Council and former Chair of its Health Committee, District of Columbia law strictly prohibits you and GPA from engaging in such communications during an ongoing procurement,” Sher continued.
“District of Columbia law also expressly prohibits you and GPA from engaging in such improper communications with District officials…as CareFirst’s agent, consultant or lobbyist,” added Sher.
During an interview with TBR Catania called the letter a “joke and the tactic of a desperate losing side.
“There is more virtue in a whorehouse than merit in that letter,” said Catania, adding “You can quote me on that.”
In an email, dated Sept 7 to Schutter, Catania asserted that DC Code 2.353.02 (g) “permits members of the general public to submit information to the [CPO] that is relevant to a prospective contractor’s responsibility or thereof.”
Then Catania proceeded to trash Amerigroup DC, which he also did during his telephone interview with TBR on Sept. 19. He claimed in his correspondence that “Amerigroup has an unambiguous history of overcharging the District’s Medicaid program;” that in 2008 the city’s attorney general “sued Amerigroup for fraud” and that in 2020 when speaking at a council hearing, Wayne Turnage, the deputy mayor for health and human services, asserted that “Amerigroup’s documented poor performance led to 20% of their members leaving their plan.”
Turnage said via email sent to TBR last month that he has “no comment on public lobbying campaigns by Medicaid health plans.” He added that “These have been a frequent occurrence during my 11 years as director of [the Department of Health Care Finance].”
Turnage his no innocent, however. He has been in charge of the DHCF during repeated mishandling of the MCO procurements.
Catania allegations are mostly half-truths, according to government sources. The fraud case was subsequently withdrawn; Amerigroup had a different owner back then. Further Turnage acknowledged at that council hearing and in a recent written report that because Amerigroup could not secure an agreement with MedStar Health, Amerigroup did not have access to certain specialty clinics and doctors. That triggered a migration of patients from Amerigroup DC to AmeriHealth Caritas, which did have an agreement with MedStar. The bad actor in that scenario wasn’t Amerigroup, however. It was MedStar.
Cody A. Leihgeber-Carpenter, OCP’s communications director, said that his agency will complete the “award process” after all protests have been resolved. He declined to comment on the Catania and CareFirst media campaign. “We defer to the Council for comment on any engagements they have had with CareFirst,” he said in an email.
Mendelson told TBR that he has “no reason to think [the procurement] was not done fairly.” He added that, “There is no good that comes from the delay” in awarding the contracts.
Some government observers TBR spoke with accused Mendelson of having a conflict of interest. Ben Young, the managing director of Georgetown Public Affairs, is also the treasurer of Mendelson’s re-election campaign committee. “He has not talked to me a lot about this,” he told TBR. “I can’t say that David has lobbied me on this.”
There may be recent history of Mendelson acting on behalf of Georgetown Public Affairs, however. Earlier this year, when the council was voting on the street lighting contract, Mendelson went to bat for M.C. Dean, another company represented by Catania’s Georgetown Public Affairs. However, the majority of the council voted to select Plenary Infrastructure DC.
Amerigroup can’t seem to catch a break, although in the previous procurement and this most recent one, its proposals have received top scores. In 2020, Amerigroup filed its own complaints with the Contract Appeals Board, which ultimately ruled that Bowser and her team had violated the city’s procurement laws. It ordered the executive to reevaluate the offers. After a series of controversial moves, Bowser eventually conducted that reevaluation, but still denied Amerigroup the contract—despite the fact that it ranked third among the four bidders.
Now, it appears that Amerigroup has once again won a competitively bid contract. This time around, however, CareFirst is the odd company out, and there is an effort to stick it once again to Amerigroup.
Tony Felts, a spokesperson for Amerigroup, said in an email to TBR that “Amerigroup DC remains committed to the District and looks forward to having the opportunity to serve the Medicaid managed care program. We are fully engaged with our District partners on this procurement process and firmly believe that we have presented a compelling value proposition geared towards improving health outcomes across every ward in the District.
“The completion of this procurement process and approval of new contract awards will provide District residents much needed benefits and services, including the expansion of behavioral/mental health services under the new MCO contract awards,” Felts added.
In an email to Mendelson dated Sept. 21, Adrian Jordan, Amerigroup’s chief executive officer and plan president, accused CareFirst lobbyists of attempting to “hijack this procurement process via a campaign of disinformation.
“You have received communication [related] to this proposed contract award that portray a false and misleading view not only of Amerigroup DC but also the procurement process itself.”
Jordan called Amerigroup “extremely well qualified to serve this population and meets the requirements set forth in the managed care contract.” He said the Amerigroup DC was recently formed in 2017 by Anthem, now Elevance Health Inc. and has “47 million members across the United States. And he also touted high performance measure validation scores from Olarant, a DHCF contractor.
"We urge the Council to ratify the selections made by the Office of Contract Procurement as part of this most recent award process. The completion of this procurement process and approval of new contract awards will provide District residents much needed benefits and services, including the expansion of behavioral/mental health services under the new MCO contract awards. "
Truth be told, the lobbying by Care First and allegations against Amerigroup is a massive case of cheek. After all, for decades CareFirst refused to provide the District money that could have been used to increase health care services for the city’s most vulnerable residents. A lawsuit was filed over the fact that it was hoarding millions of surplus revenues, some of which went to help increase the salaries of top executives.
Finally, it agreed last year to a settlement totaling $95 million. There probably is more that is owed the city but elected officials haven’t aggressively gone after the health care giant’s wallet.
Now CareFirst executives and its lobbyist want the public to think they have only the interest of District residents at heart. Please.
This article has been updated to include information about emergency sole source contracts to existing managed care companies that were deemed approved on Sept. 30, 2022.