COUNCIL OF THE DISTRICT OF COLUMBIA

THE JOHN A. WILSON BUILDING

1350 PENNSYLVANIA AVENUE, NW
WASHINGTON, D.C. 20004

VINCENT C. GRAY Committee Member:

Ward 7 Councilmember Business and Economic Development
Chair, Committee on Health Judiciary and Public Safety

October 3, 2022

City Administrator Kevin Donahue

Office of the City Administrator
1350 Pennsylvania Avenue, NW, Suite 513
Washington, DC 20004

Dear City Administrator Donahue:

As the Chair of the Committee on Health, I am writing to express deep reservations, which I
believe are shared by a number of my Council colleagues, about the recent procurement of the
District’s Medicaid Managed Care Organization (“MCO”) contracts. A third of District residents rely
on these health plans for themselves and their families. The vast majority of Medicaid beneficiaries
are African Americans who have faced decades of systemic racial inequities in healthcare. The
selection of reputable, high-quality plans is essential to addressing these health disparities, especially
as this most recent procurement bid is for a five-year contract, rather than the typical one-year contract
with options.

We hope that when the District seeks bids for contracts, we are getting the best price and value
to benefit our constituents. Part of the vetting process means that we should consider past
performance, how a contractor has performed with us or others in similar circumstances. We have
provisions in the Code to reflect that common sense principle which requires the Chief Procurement
Officer ensure that a prospective contractor, among other considerations, has a satisfactory
performance record, a satisfactory record of integrity and business ethics, a satisfactory record of
compliance with the law, and has not exhibited a pattern of overcharging the District (D.C. Official
Code § 2-353).

I have significant concerns that the latest contracting process for the MCO bids has not
accounted for these standards. I requested a copy of the instructions for evaluators for this
procurement to verify if these requirements were adequately reflected in the evaluation process, and
sadly they were not. The documents I received from the Office of Contracting and Procurement (OCP)
show that evaluators for three of the biggest contracts in the District made the awards without
meaningfully complying with our laws designed to protect residents from bad contractors. Even if
an evaluator knew more about the prospective contractor’s history, that knowledge could not be
considered, even if that history shows a pattern of harm to the same medically vulnerable people
harmed in a prior contract with the District.

After a series of events following Council’s actions last year, I have learned that we are poised
to bring back an MCO with a checkered history in the District and a well-known reputation for
denying care to vulnerable Medicaid members. The plan has been part of the District’s Medicaid
program on two separate occasions.
The first occasion ended with the District’s Inspector General finding that the plan overcharged the
District by $74 million which prompted the District’s Attorney General to sue it for fraud, and our
Medicaid Director to refer them to the U.S. Department of Justice for investigation. Within 18 months
of this plan returning to the Medicaid Program in 2018, 20% of the beneficiaries left the plan, putting
the entire program at risk by shifting residents who are higher risk onto the other two Medicaid
contractors. We demand more of a background check for certified nurse assistants who make
minimum wage to ensure that they do not have a history that could put the care and safety of
vulnerable patients in jeopardy, but we did far less in considering the background of prospective MCO
contractors, who with their business practice, could cause far more harm. We cannot stick our low-
income residents with underperforming health plans for the next five years and pretend that our hands
are tied and we have done our best for these residents.

As I understand it, three of the competing plans made minor typographical errors on their
subcontracting plan, and rather than allowing the corrections, the OCP chose to disqualify them. Even
after the Contract Appeals Board (CAB) informed OCP that it had the authority to allow the parties
to make the minor corrections, OCP refused to do so. This tragedy of errors was exacerbated when
the three prospective contractors appealed to the CAB which issued conflicting decisions on
essentially the same set of facts. This meant there were two different procurements, with two plans
in each procurement. At no point were the four plans evaluated against each other on the issues that
matter, like the quality of their work.

I have greatly appreciated working with you and Mayor Bowser to strengthen healthcare in
underserved areas of the District, most notably through the establishment of the Cedar Hill Regional
Medical Center. I fear that simply approving a contract with an MCO with a well-documented record
of denying care could undue much of our hard-fought progress.

As Chair of the Committee on Health, I am strongly considering a request of my colleagues

to disapprove these three Managed Care contracts. My consideration assumes that should I seek and
receive disapproval, the Executive will take the necessary steps to submit to Council a continuation
of the existing emergency contracts to avoid any interruption in healthcare service for over 300,000
vulnerable residents while steps are being taken for an improved procurement.

Sincerely,

Vincent C. Gray

cc: Wayne Turnage, Deputy Mayor of Health and Human Services

George Schutter, Chief Procurement Officer, Office of Contracting and Procurement
Phil Mendelson, Chairman
Kenyan R. McDuffie, Chair Pro Tempore, Councilmember Ward 5
Anita Bonds, At-Large Councilmember
Elissa Silverman, At-Large Councilmember
Robert C. White, Jr., At-Large Councilmember
Christina Henderson, At-Large Councilmember
Brianne K. Nadeau, Ward 1 Councilmember
2
Brooke Pinto, Ward 2 Councilmember
Mary M. Cheh, Ward 3 Councilmember
Janeese Lewis George, Ward 4 Councilmember
Charles Allen, Ward 6 Councilmember
Trayon White, Sr., Ward 8 Councilmember