jonetta rose barras: Is a managed care contracting fight looming in DC?

That’s the question I asked myself, after learning from several sources that CareFirst BlueCross BlueShield Community Health had optimistically announced earlier this year during an internal meeting of its employees that the company would be back in what could be called the catbird seat for local health care insurers: It would soon be securing a managed care contract. That means billions of dollars over multiple years from DC’s Medicaid program. 

“It wasn’t a matter of ‘if,’ but ‘when,’ is what was said,” according to one individual who attended CareFirst’s town hall meeting this summer.

I did not receive a response to my requests for comment sent to the company’s media relations department through its website. 

CareFirst’s internal vision sharing came not long after the DC Department of Health Care Finance (DHCF) launched an unannounced and aggressive oversight review of Wellpoint DC, a managed care provider previously known as Amerigroup DC. Sidestepping my question about whether, in fact, the District intended to bring CareFirst into its stable of managed care organizations, Wayne Turnage, DC deputy mayor for health and human services, told me that the city had cited Wellpoint for 27 violations of its contract.

“The violations run the gamut,” Turnage said during a telephone interview earlier this month. “A copy of the notice of violation was sent to [the Office of Contracting and Procurement] and the [Office of the Attorney General].”

Turnage declined to delineate those 27 violations. His office also refused to provide me with a copy of the corrective action plan he said Wellpoint had submitted. Instead, I was referred to OCP.

“We are still served by three health plans [AmeriHealth Caritas, MedStar Family Choice and Wellpoint]. That does not change unless or until we indicate [Wellpoint] was no longer eligible to stay in the plan,” added Turnage. 

“This may sound childish, but for some reason Turnage — and the DC government — just doesn’t like Adrian,” one government source privy to the inner workings of DHCF said in reference to Adrian Jordan, Wellpoint DC’s president and CEO.

“Wellpoint’s performance and management is equal [to] or better [than] the other MCPs,” continued the source, adding that all need improvement. “But Wellpoint wasn’t cited for anything negative in the city’s own report card.”

In fact, Qlarant, the city’s independent third-party evaluator, wrote in a recent report using 2023 data that it had reviewed “MCP compliance in providing Medicaid managed care enrollees with quality and timely access to care and concluded, on average, MCPs are meeting requirements and demonstrating their commitment to quality improvement.”

“In most instances, stakeholders can have high confidence in their compliance with federal regulations and DHCF contract requirements,” evaluators wrote.

“The whole thing is weird,” said the government source. “I think a setup is underway.” 

Or as Yogi Berra might quip, “It’s déjà vu all over again.”

When Mayor Muriel Bowser and Turnage last decided to rebid the city’s managed care contract — in 2020 during the COVID-19 pandemic — the ensuing three-year battle involved multiple claims filed by multiple companies before the DC Contract Appeals Board. Members of the DC Council filed a series of disapproval resolutions. And a lobbyist launched a vicious public media campaign designed to tarnish the reputation of what was then still known as Amerigroup. 

DC Council Chair Phil Mendelson recalled that “CareFirst was the losing bidder three years ago, and hired a public relations firm” owned by former at-large DC Councilmember David Catania for help.

“But CareFirst’s bid simply didn’t qualify,” added Mendelson

News about a possible shuffling yet again of Medicaid managed care plan operators comes in the context of a highly charged political environment centered on health care, including allegations of mismanagement and fraud. Currently a federal government shutdown is threatened as Democrats push for Republicans to repeal changes made to the Affordable Care Act (ACA) in a previous bill that funded President Donald Trump’s tax breaks for billionaires, among other things. Democrats also want an extension of the health care tax credit, which is expected to expire Dec. 31.

In the District, when the 2026 fiscal year begins on Oct. 1, at least 50,000 residents, mostly low-income and undocumented immigrants, will be removed from Medicaid and the DC Health Alliance rolls. The majority of them will likely be enrolled into the Healthy DC Plan — a basic health care plan created by the DC Health Benefit Exchange Authority under the ACA, according to Mila Koffman, the agency’s executive director. The process is underway, but the coverage won’t take effect until Jan. 1, when the program formally launches.

Koffman, her staff and a voluntary advisory board have labored since the spring to ensure that low-income residents who are losing their Medicaid because of eligibility changes instituted by Mayor Muriel Bowser will not be left without any health care.

“We still need the federal green light,” Koffman told me during an interview earlier this week. She hopes to secure approval from the Trump administration by Oct. 1.

Unfortunately, federal law blocks the District’s ability to offer the new coverage to undocumented immigrants, many of whom had been insured via the DC Health Alliance, which also covered other low-income residents ineligible for Medicaid. Budget limitations made it infeasible to continue the program as it had been operating, according to DC officials.

As evidence of Koffman’s hard work, the Healthy DC Plan does not fully rely on the federal government’s extension of the health care tax credit. That’s a good thing since the expiration is likely to occur. If it does, it will surely mean that millions of Americans — including many in DC — will see their health costs skyrocket.

However, the main effect for DC’s former Medicaid recipients shifting to the Healthy DC Plan will be that adults will not receive dental and vision benefits. If, on the other hand, the credit is extended, Koffman told me that she has instructed the carriers that DC will use the savings to pay for those critical services.

There will be no monthly fees or cost-sharing under the new plan, Koffman told me. 

In my view, she should receive the employee of the year award for leading her office — and the DC government — to what thus far appears to be a successful outcome given the current situation.

Could a wrong move or the perception of shenanigans regarding the MCO contracts bring attention from Republicans looking to use health care the way they have used crime to bludgeon the city’s ability to govern itself, replete with warnings of a full-on federal takeover?

“Every day is a new day. Every day is spent battling misinformation,” at-large DC Councilmember Christina Henderson, chair of the Committee on Health, replied when I asked her during a telephone interview earlier this week whether she is worried about Republican reaction to the budding managed care controversy.

“I don’t know what’s going to happen on the Hill,” added Henderson, who has scheduled a roundtable for next week with managed care plan operators. She doesn’t expect to probe the behind-the-scenes machinations around CareFirst, however; she said she is “going to leave that process to OCP,” although she offered that she has “talked to Wellpoint.” She did not share any specifics about those conversations.

Henderson said she has “some questions in terms of health outcome data” and whether the managed plans are “living up to the letter of the contract.”

The hearing had been scheduled for earlier this year. It was postponed, said Henderson, because “there was a lot of focus on the federal government.”

Could that have been around the time House Republicans decided to treat DC like a federal agency, forcing it to reduce spending by $1.1 billion in the middle of its fiscal year?

Despite that intrusion and others, Mendelson said predictions like mine about repercussions from Capitol Hill generally never come to pass: “95% of the time nothing comes of it.” He argued that the reason GOP scrutiny of public safety has risen to the level it has is because members of Congress know it’s “an issue in their home districts.”

“Wellpoint won’t get that attention,” concluded Mendelson. 

That may be wishful thinking. 

Who would have thought House Republicans could pass 13 bills out of committee and get four approved, all in less than two weeks? Each proposal interferes with DC’s self-governance. One that has yet to come to the floor would repeal the law creating the District’s elected attorney general. Even the many DC residents who have been critical of Brian Schwalb’s handling of crimes involving juveniles are likely to have trouble with the idea of removing an elected official and replacing him with a presidential appointee who would become the District’s chief legal officer.

Will Republicans add this Wellpoint case to their list of grievances? Who knows? Who even knows what Schwalb’s office has done after receiving notification of alleged contract violations?

Gabe Shoglow-Rubenstein, an OAG spokesperson, did not reply to my email seeking an answer to that question. 

Nancy Hapeman, DC’s chief procurement officer, did not return any of the four calls I made to her office seeking a comment. Cody Leihgeber-Carpenter, the agency’s communications director, also did not return telephone calls to his office and cellphone.

However, Sisy Garcia, an OCP public information officer, confirmed earlier this week via email that the agency has “communicated with Wellpoint District of Columbia, Inc. regarding certain performance issues with Wellpoint’s managed care contract. OCP anticipates continued discussions and exchanges of information regarding these issues in order to reach a final decision.

“Accordingly, at this time, information regarding the above-referenced issues is exempt from disclosure to the public due to its sensitive nature and active consideration as part of the deliberative process. See D.C. Official Code § 2-534(a)(1); (e),” added Garcia.

Seriously? Why don’t taxpayers picking up the health care tab have the right to know what the government is doing with their money?

I sent an email to Wellpoint DC’s president and CEO, requesting an interview. He forwarded my correspondence to the communications director of his parent company, Elevance Health. Rather than agreeing to an interview, the spokesperson sent a statement: “Wellpoint DC is firmly focused on delivering high-quality health care services to our members and on meeting the requirements of the District’s Medicaid program.

“We work in close partnership with the DC Department of Health Care Finance and all of our government partners to uphold and exceed program standards, as evidenced by our recent, successful [National Committee for Quality Assurance] accreditation,” the spokesperson wrote. “We take oversight seriously, and through our collaboration with DHCF, we remain committed to maintaining reliable access to care for our members.”

Playing nice probably won’t win Wellpoint any gold stars. It is already losing business it surely hoped to retain.

Koffman, the head of the Health Benefit Exchange Authority that has created the new Healthy DC Plan, told me that she and her staff have been reviewing the files of individuals who will be leaving the Medicaid program. Those residents are being assigned to one of three carriers, two of which are AmeriHealth Caritas and MedStar Family Choice — current Medicaid MCPs. 

The third would have been Wellpoint. 

However, the uniform contract for carriers in the Healthy DC Plan includes a clause rendering ineligible any insurance operator that “failed to comply with a contractual or regulatory requirement,” as indicated by DHCF and/or the Department of Insurance, Securities and Banking. Wellpoint, as the subject of DHCF’s notice of “contract violations,” appears to be the only MCP being pushed out of the action.

CareFirst, which was serving only commercial clients on the DC Health Benefit Exchange, will now step into Wellpoint’s slot in the Healthy DC Plan. As a result, it will gain the kind of technical experience that was deemed lacking when the company last competed for a Medicaid managed care contract. Meanwhile, Wellpoint, which bested CareFirst in the last competition, will take a hit to its reputation. 

And that, dear readers, is how the Bowser administration clears the road for a favored contractor. 

jonetta rose barras is an author and DC-based freelance journalist, covering national and local issues. She can be reached at thebarrasreport@gmail.com.