Medstar Family Choice Insurance

UPDATE:  D.C. council members recently introduced a disapproval resolution for the Amerigroup contract, Washington Business Journal reported. The move will temporarily put a stop on the contract's approval for 45 days. This will give MedStar some time to make its case for the contract.

"We appreciate the time the Council is taking to review the decision, which demonstrates their commitment to the 58,000 residents who rely on MedStar Family Choice for their Medicaid coverage," a MedStar representative sent to Healthcare Dive regarding the situation.

Dive Brief:

• The District of Columbia plans to award five-year Medicaid managed care contracts to Trusted Health Plan, AmeriHealth Caritas and Anthem subsidiary Amerigroup DC, Washington Business Journal reported.
• Notably missing was MedStar Family Choice, MedStar Health’s managed care plan, which has served about 58,000 beneficiaries, or close to 30% of the D.C. Medicaid population, since 2013.
• In a statement on MedStar’s website, Eric Wagner, executive vice president of insurance and diversified services, said the nonprofit health system was “extremely disappointed and puzzled” by the decision not to renew its contract.

Dive Insight:

The retention of AmeriHealth and Trusted offer stability while Amerigroup adds a national player to the mix, according to Wayne Turnage, director of the D.C. Department of Health Care Finance.

“The changes that we have made in our managed care program since 2011 are significant and have been especially designed to emphasize health plan accountability while improving patient outcomes for the more than 181,400 Medicare members and roughly 15,500 Alliance beneficiaries,” Turnage said in a statement.

In its 2016 performance report on the Medicaid program, released in April, DHCF said Trusted, AmeriHealth and MedStar all ended the year in good financial shape and were in full compliance with the District’s prompt payment requirements. MedStar saw the greatest enrollment growth — up 54% from 2013.

However, the report also noted MedStar’s per member, per month expenses were at least 40% more than the other two plans, due in part to a beneficiary population that required a higher volume of more expensive medications.

And the Columbia, MD-based health system’s claims denial rate, at 19%, was nearly twice as high as Trusted (11%) and more than double AmeriHealth (8%) and the D.C.-based Health Services for Children with Special Needs, or HSCSN (8%).

MedStar’s Wagner called the change of managed care plans “especially risky” given the uncertainty about Medicaid funding under the current administration. D.C. was among the earliest jurisdictions to seek Medicaid expansion under the Affordable Care Act, along with California, Colorado, Connecticut, Minnesota, Missouri, New Jersey and Washington. Today, 32 states and D.C. have expanded Medicaid programs.

DHCF’s choices for Medicaid contracts must still be approved by the D.C. city council. They are slated to take effect Oct. 1, and include one base year and four option years.