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Department of Health Care Finance Announces Medicaid Program Reforms and Intent to Re-Procure Managed Care Contracts

Wednesday, September 11, 2019
Shifting from Paying for Volume of Service to Paying for Value Will Support Efforts to Improve Health Outcomes for District Residents

(Washington, D.C.) – The Department of Health Care Finance (DHCF) today announced plans to move towards a fully managed Medicaid program over the next five years.This move aims to transform the managed care program into a more organized, accountable, and person-centered system that best supports the District’s Medicaid beneficiaries in managing and improving their health.

Initially, DHCF will transition nearly 22,000 individuals currently in the Medicaid fee-for-service program to the Medicaid managed care program, effective October 1, 2020. Health care costs for individuals with fee-for-service coverage are typically four-to-five times greater than persons in managed care as they tend to experience substantially higher rates of emergency room use, hospital admissions, and inpatient stays. Today, these beneficiaries must manage their health care needs without assistance or care coordination. By joining the managed care program, this population will receive access to much needed care coordination, and as a result, improved health outcomes.

DHCF is also launching two major changes that will improve equity and value for the Medicaid, Alliance, and Immigrant Children’s Programs (ICP).  First, DHCF will expand value-based purchasing requirements in the managed care program to ensure Medicaid enrollees receive the best care possible. This change is intended to promote an enhanced focus on health outcomes for Medicaid enrollees to extract greater value from the District’s investment. Second, DHCF will implement universal contracting for critical providers in the city’s health care market.  This will even the playing field and improve access to needed health care providers for all Medicaid enrollees. Given DHCF’s role as the payer for 40 percent of the District’s population, these changes will also have a broader positive impact for the District’s health care delivery system.

To effectuate these changes, DHCF will work with the Office of Contracting and Procurement (OCP) to re-bid the contracts for its managed care program. The current contractors in the managed care program – AmeriHealth Caritas of DC (AmeriHealth), Amerigroup, and Trusted Health Plan (Trusted) will operate the program as presently organized for Fiscal Year 2020.

“We believe these changes are necessary to strengthen and restructure our Medicaid program in ways that will ensure program equity, while expanding the focus and reach of the program to include individuals who have historically been excluded from the benefits of managed care in the District.” said Deputy Mayor for Health and Human Services and DHCF Director Wayne Turnage.

Currently, DHCF spends more than $1 billion on its full-risk managed care program for approximately 276,263 Medicaid, Alliance and ICP beneficiaries. As with the previous contracts, the managed care organizations that are selected for this program will be required to meet quantifiable measures of network adequacy, enhanced case management, program staffing standards, aggressive and innovative outreach objectives, improved hospital outcomes, and achieve quality and performance standards.

Melisa Byrd, the District’s Medicaid Director, stated, “These reforms complement our actions to expand value-based payments, improve health outcomes, and strengthen the accountability of our program. We look forward to partnering with managed care organizations that share our mission and have a demonstrated record of innovation in the delivery of healthcare to individuals who have chronic health care problems and who have long suffered poor health outcomes.” DHCF will begin stakeholder engagement sessions in October to discuss the program expansion. Details will be provided through the DHCF website.

DHCF is excited about the opportunity to invite health plans to compete for contracts in a restructured managed care program for the Medicaid, CHIP, Immigrant Children’s and Alliance programs. OCP will manage the competitive procurement process and Director George Shutter will soon announce the release of the Request for Proposals. DHCF anticipates announcing the selection of the winning bidders in the Spring of 2020. 

The Department of Health Care Finance is the District’s State Medicaid Agency. The mission of the Department of Health Care Finance is to improve health outcomes by providing access to comprehensive, cost-effective and quality healthcare services for residents of the District of Columbia. For more on DHCF, please visit https://dhcf.dc.gov/