Ward 7 Councilmember Vince Gray Credit: Darrow Montgomery

Ward 7 Councilmember Vince Gray accused fellow lawmakers of attempted contract steering in the latest chapter of the Medicaid managed care contract debacle. Councilmembers framed the debate during the June 29 legislative meeting as a struggle between disruption in medical coverage for Medicaid enrollees versus fidelity to contracting law.

In a letter sent to all D.C. councilmembers Monday, Gray wrote that a bill from Chairman Phil Mendelson and Councilmembers Robert White (At-Large) and Kenyan McDuffie (Ward 5) “is a thinly veiled attempt to steer a contract to Amerigroup,” which last year lost its bid to manage healthcare for some of the District’s Medicaid beneficiaries. In June of 2020, the Office of Contracting and Procurement awarded the $1.5 billion Medicaid contract to MedStar, CareFirst, and AmeriHealth.

The bill in question would require OCP to re-evaluate bids from all four companies as ordered by the Contract Appeals Board. Last December, the CAB, a quasi-judicial body that adjudicates government contract disputes, upheld a protest from Amerigroup and ordered OCP to re-evaluate, but the agency has been dragging its feet for the past six months.

In its re-evaluation, OCP must take into consideration the CAB’s ruling in another case. In August 2020, the CAB ruled that bidders’ proposals must include a plan for how they will subcontract with small local businesses. D.C. law says the subcontracting plan must be included in the initial proposal. OCP has previously admitted that it has violated the law for years and allowed subcontracting plans to come in later in the process. Medstar did not submit a complete subcontracting plan in its initial proposal, so a re-evaluation could replace Medstar with Amerigroup.

“Ethically, this is a path Council should never contemplate, let alone take,” Gray wrote in the letter. He argued that with MedStar removed from consideration in the Medicaid contract, the bill would disrupt medical coverage for about 65,000 people.

White, responding to Gray’s letter during the legislative meeting, called the allegation of contract steering a red herring. The issue, as White sees it, is about holding local agencies accountable when they violate the law.

“That is offensive and unnecessary,” White said to Gray’s accusation of contract steering. “I have such great respect for my colleague, and I hope he will contradict what he put in his letter because it was inappropriate.”

McDuffie was more pointed.

“It is disgusting to me that there would be allegations of contract steering by the Council, when in fact what [Deputy Mayor Wayne Turnage] and mayor are asking us to do is steer a contract,” McDuffie said Tuesday. “To retroactively fix a mess they created.”

Since the CAB ruling, the Bowser administration has repeatedly tried to avoid it. Like Gray, executive branch officials have said the re-evaluation will be disruptive to tens of thousands of Medicaid enrollees.

During Tuesday’s debate, At-Large Councilmember Christina Henderson questioned why the bill was still necessary. She pointed to a letter Turnage sent to members of the Committee on Health last week. The letter, according to Henderson, said the re-evaluation has already begun.

McDuffie was still was not convinced.

“Who is it coming from?” McDuffie asked. “Because if it’s coming from the same deputy mayor, then when I ask questions about procurement, he doesn’t seem to know the answers to those, but he conveniently has answers about procurement when it benefits what he wants to see happen in terms of who gets this contract.”

McDuffie pointed out that instead of hearing from OCP Director George Schutter, Mayor Muriel Bowser, and Gray, who chairs the health committee and has oversight in this area, the Council is largely hearing from Turnage.

“He’s saying they’re doing this. There’s no real indication to me that they are,” McDuffie said of Turnage. “Do you have any evidence they’ve started re-evaluation? Because in terms of credibility, I’m not willing to just stand on what he’s saying these days.”

In an email to Loose Lips following the Council debate, Turnage emphasized his commitment to truthfulness in his dealings with the mayor and the Council since he became director of the Department of Healthcare Finance in 2011.

“I have always been completely transparent and honest in my communications with the Mayor’s office and the Council,” Turnage wrote in the email. “That Councilmember McDuffie would, without the slightest justification, impugn my character in a public meeting, says a lot more about him than it does me.”

The bill passed 9-4. Gray, along with Councilmembers Brooke Pinto (Ward 2), Brianne Nadeau (Ward 1), and Mary Cheh (Ward 3), voted no.