Letter sent by Councilmember Robert White and colleagues following the Office of Contracting and Procurement’s missed deadline on June 30   

For Immediate Release:

WASHINGTON, DC (July 21, 2022) – Today Councilmember Robert White and Council colleagues sent a letter to Deputy Mayor for Health and Human Services Wayne Turnage and Chief Procurement Officer George A. Schutter to discover why they did not meet the June 2022 deadline that the Council and administration agreed to for the $1.5 billion Medicaid Managed Care Organization (MCO) contracts, and to discern a detailed timeline for when the contracts will be executed.

The MCO contracts are among the largest set of contracts that DC has. Last fall, Chief Procurement Officer Schutter reported that a breakdown had occurred during the MCO contract procurement process and he requested an extension of the previous contracts in order to avoid disruption in healthcare access for District residents on Medicaid and Alliance. On October 5, 2021, the Council approved emergency legislation to extend these contracts through June 30, 2022, based on the administration’s testimony that they would complete the procurement process for a new set of Medicaid and Alliance MCO contracts by that date.

June 2022 has now passed and the Council has not received new MCO contracts for approval.

“The Council worked in good faith with the administration to extend the procurement deadline until June 2022,” said Councilmember Robert White. “At this point, we need more information. Contracts of this size are always protested, so I don’t see that as a valid excuse for missing the timeline.” White said, “The healthcare for District residents who need Medicaid is hanging in the balance. Whether the delay in providing the contracts for Council review was purposeful remains to be seen. Either way, we will not allow the Council’s legislative recess to be used as a pretext for the administration avoiding following legal procurement requirements or using a tight timeline to goad the Council into passing additional emergency measures. We are long overdue for a contract award based on a consistent, rational evaluation of objective factors. District residents deserve to know that their government is procuring MCO services in a fair and transparent manner.”

White said, “Any further extension of the expired contracts would entrench the suspicion that the District is playing favorites and would be a serious violation of the public trust. Without additional insight from the administration, a special joint hearing with the Committee of the Whole regarding these contracts during the recess may be warranted.” Councilmember White requested a response from Deputy Mayor Turnage and Chief Schutter no later than July 28.

For reference, the full text of the letter is included below.

Media Contact:

Devon Haynes, Communications Director
202-600-1866
dhaynes@dccouncil.us

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July 21, 2022

George A. Schutter
Chief Procurement Officer
Office of Contracting and Procurement
441 4th Street, NW, Suite 330 South
Washington, DC 20001

Wayne Turnage
Deputy Mayor for Health and Human Services
1350 Pennsylvania Avenue, NW, Suite 223
Washington, DC 20004

Dear Chief Schutter and Deputy Mayor Turnage:

We write to express serious concerns regarding the District’s current process for awarding new contracts to managed care organizations (MCOs) to administer our Medicaid and Alliance programs, and to request immediate answers regarding the status of these impending contracts. District residents deserve to know that their government is procuring MCO services in a fair and transparent manner. These contracts were the source of immense controversy last year when the Executive presented the Council with no option but to extend legally challenged contracts or leave 250,000 of our most vulnerable residents without health care coverage.

On October 5, 2021, the Council approved emergency legislation to extend MCO contracts through June 30, 2022, based on the administration’s assurance that you would complete the procurement process for a new set of Medicaid and Alliance MCO contracts by that date. The compromise was this 9-month timeline coupled with the Council both dropping its objections and extinguishing the legal challenges then pending. Chief Schutter provided sworn testimony at a roundtable before the Committee on Government Operations and Facilities on October 29, 2021 that “The District aims to have the solicitation out before Thanksgiving with the intention of sending a negotiated contract to Council for approval by June 2022. This timeline will provide adequate time for review by the Centers for Medicare & Medicaid Services as necessary, followed by a three-month implementation period ending in October 2022” (emphasis added).

June 2022 has passed, and the Council has not received new MCO contracts for approval. The Office of Contracting and Procurement (OCP) and the Department of Health Care Finance (DHCF) have reportedly identified three winning bidders of the new contract and have prepared contracts with those bidders. But instead of submitting those contracts for ordinary passive approval prior to Council recess, the Executive filed, and the Council passively approved, yet another extension of the old contracts covering the period from July 1, 2022 through September 30, 2022 at a cost of up to $295,644,303.93.

The only explanation suggested for the latest delay is that one or more protests before the Contract Appeals Board (CAB) and appeals before the Superior Court remain pending. Yet it is within the Executive’s power to submit contracts for Council pre-approval pending resolution of legal disputes. Beyond that, our understanding is that when the CAB stays execution of a significant contract pending resolution of a protest, the Executive typically moves to lift the stay. Similarly, our understanding is that when a court stays execution of a significant government contract pending resolution of an appeal, the Attorney General routinely files for expedited consideration of the appeal on behalf of the client agency. Therefore, the fact that the most recent award was protested is no justification for the Executive’s inaction; the high dollar value of these contracts made it a virtual certainty that a protest would arise in this process, and that was known at the time of the October roundtable.

Chief Schutter detailed various ways in which he anticipated that the new procurement would be more methodical, rigorous, and accountable than past attempts at procuring MCO services. Therefore, for the sake of fairness and responsibility in contracting, the District should seek performance of the new contracts as soon as possible rather than extending the expired contracts any further.

Please be advised that any further extension of the expired contracts would be a serious violation of the public trust; that the Council has adopted special rules for its summer recess to allow filing of the new MCO contracts; and that a special joint hearing with the Committee of the Whole regarding these contracts during the recess may be warranted. To ensure that the Council’s actions are fully informed, please provide the information requested below:

• Is it correct that the winning bidders were chosen in early June?

• Why was a decision made that the new MCO contracts would not be submitted to the Council for pre-approval prior to our summer recess?

• Who in the Executive Office of the Mayor (EOM) decided, or approved the decision, not to submit the contracts to the Council prior to Council recess?
  
• What facts or events is the Executive awaiting now, before submitting the contracts to the Council?

• Please provide a detailed timeline of your current best estimate of next steps to completion of this procurement, including contract submission to the Council, contract execution, and any transfer of beneficiaries.

• Given the significance of these contracts, has the Executive moved for the CAB to lift all stays on the execution of the new MCO contracts?
  
  • If so, please provide the date(s) the motion(s) were filed, and whether a decision has been made on the motion(s) by the CAB.
    
  • If not, who in the EOM made the decision NOT to request that the CAB allow the new MCO contracts to move forward during the pendency of any protests?

• Given how important it is for these contract issues to be resolved as soon as possible, has the Executive moved for the Superior Court to expedite consideration of all appeals regarding the new MCO contracts?
  
  • If so, please provide the date(s) the motion(s) were filed, and whether a decision has been made on the motion(s) by the Superior Court.
    
  • If not, who in the EOM made the decision NOT to request that the Superior Court expedite consideration of appeals of the new MCO contract awards?

If your answer to any part of this letter includes confidential advice of counsel, please direct the Office of the Attorney General to send us a privileged memorandum.

With billions of District taxpayer dollars implicated by these contracts, the operational complexity of transitioning beneficiaries from contractor to contractor, the importance of ensuring that our vulnerable residents receive reliable medical treatment, and the long history of delays and missteps that have troubled this procurement, it is particularly important that the Council have a full understanding of this procurement. We appreciate your prompt response no later than 12pm on July 28, 2022.

Sincerely,

Councilmember Robert C. White Jr.                           Chairman Phil Mendelson

Councilmember Elissa Silverman                               Councilmember Brianne K. Nadeau

Councilmember Janeese Lewis George