Dive Brief:
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MedStar is trying a last-minute blitz on city hall to get Washington D.C. to change its mind about its Medicaid managed care program, The Washington Post reported. In May, the D.C. Department of Health Care Finance (DHCF) chose three managed care organizations for five-year managed care contracts. The department did not renew MedStar for the program. It instead chose Amerigroup and renewed AmeriHealth Caritas and Trusted Health Plan.
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D.C. regulators said MedStar has been charging more and has more hospital admissions than the two other managed care organizations with contracts, according to The Washington Post.
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MedStar lobbyists have reportedly pushed D.C. Council members to rethink the decision. In response, nearly half of the council agreed to a resolution to temporarily block the contracts in June until council members get more information. The move gave MedStar 45 days to make its case but that deadline is coming to a close. Meanwhile, MedStar filed a protest with the D.C. Contract Appeals Board claiming the bidding process was unfair.
Dive Insight:
DHCF’s three choices still need approval from the D.C. city council, which is why MedStar, which also operates 10 hospitals in the D.C. and Baltimore areas, is heavily lobbying the board to reconsider. The new contracts with the managed care organizations are expected to take effect October 1. The contract will include one base year and four option years.
MedStar's managed care program, which is called MedStar Family Choice, has served about 58,000 Medicaid beneficiaries — about 30% of the D.C. Medicaid population, since 2013.
DHCF released a report in April that found all three managed care organizations ended 2016 with strong finances. MedStar had the largest enrollment growth with 54% more members since 2013.
The report also found MedStar’s per member, per month expenses were at least 40% higher than the other plans. DHCF said this was partly because of the beneficiary population, which required more expensive medications. DHCF also pointed to MedStar’s claims denial rate (19%), which was higher than Trusted (11%) and AmeriHealth (8%).
When finding out about D.C.’s decision in May, MedStar EVP of Insurance and Diversified Services said the health system was “extremely disappointed and puzzled” by the decision.