D.C. Financial Authority Transmits Proposed Contract for Health Care Services for Uninsured District Residents to Mayor Williams
April 18, 2001

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NEWS RELEASE

District of Columbia Financial Responsibility And Management Assistance Authority
Washington D.C.

D.C. Financial Authority Transmits Proposed Contract for Health Care Services for Uninsured District Residents to Mayor Williams

"We are very confident that the proposed contract will improve access to high quality services for uninsured residents with the added advantage of providing the Mayor and the Council with the information and flexibility to continue further reforms into the future," said Authority Chairman, Alice Rivlin.

The proposed contract is the product of a process that began in December of last year when local District government officials and the Authority agreed to solicit bids from the private sector to manage safety net, health care services. The process began as a response to the management and financial breakdown of the Public Benefit Corporation and DC General Hospital.

The proposed contract is for an initial 5-year term (with two 2-year options). Highlights of the proposed contract include:

• Health services for District residents without health insurance whose family income is at or below 200 percent of the federal poverty level;
• An average increase in service volume of more than 30 percent over the current PBC level of direct health care services and administration, at a base operational cost of no more than $66.3 million;
• A requirement to provide monthly, quarterly, and annual reports on volume, utilization, quality and costs;
• Significant protections for District taxpayers require that; the contractor maintain a performance bond, that payments are made only for delivered services, and the District retain the right to assign any part of the contract to another provider if any party to the proposed agreement fails to perform.

Following several months of discussions aimed at building consensus, Dr. Rivlin recommended that the Council respond expeditiously. "It is in the best interests of the patients that have been traditionally served by the PBC, the taxpayers and Home Rule that local elected officials take the necessary steps to support the implementation of the proposed contract as soon as possible."

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Summary of Contract with Greater Southeast Community Hospital
D.C. Healthcare Alliance

• Greater Southeast Community Hospital (hospital-based care; operation of DC General-based emergency services)

• D.C. Chartered Health Plan (patient information / care management; primary care services)
• Children's National Medical Center (pediatric health services ; school health program)
• George Washington University Hospital (additional specialty and trauma care)
• Unity Health Care (primary care services; operation of public community clinics)
• Other practitioners (primary and specialty care services; diagnostic and ancillary services)

Contract Price (annual): 

Health care services and administration:

• upper limit: $66,276,043 (20% above base service volume)
• middle range: $60,250,949 (base service volume)
• lower range: $54,225,854 (20% below base service volume)

Additional services

• School Health Program: $7,010,522
• Corrections: $3,715,858
• Trauma capacity: $1,399,525
• District grant programs: $1,081,000 (potential)
• Pharmacy Services: $3,400,000

• Capital funding: $11,800,000
• Start-up support: $1,500,000

Contracted Services:

Medically necessary health care services, including: 

• Primary and preventive health services
• Emergency and Level 1 trauma services
• Inpatient and outpatient hospital services
• Specialty physician services
• Language translation services
• Disease management
• Diagnostic testing and evaluation
• Dental care

Program enrollment and data management.

Excluded Services: Tertiary care services not currently provided at D.C. General Hospital to the extent services are not available at Greater Southeast Community Hospital (e.g., open heart surgery.)

Eligible Recipients: 

District residents without health insurance coverage whose family income is at or below 200 percent of the federal poverty level.

• Family of one: maximum income of $17,180
• Family of two: maximum income of $23,220

Volume of Services (annual): 

• Inpatient hospital services: 4,560 admissions
• Emergency room services: 40,280 visits
• Ambulatory surgery: 2,144 procedures
• Outpatient-hospital services: 46,015 visits
• Primary care services:. 39,192 visits
• Physician services: 169,668 encounters
• Dental services: 15,820 visits

Volume Adjustments: Contractor may adjust the volume of services provided across service categories depending upon the needs of the eligible population, subject to the total value of the contract. For example, reducing hospital admissions by five percent (5%) of the contracted amount will permit a twenty-five percent (25%) increase in primary care services under the Contract.

The volume of care purchased through the Contract will be adjusted periodically based on actual experience and expansions in insurance coverage for the eligible population.

Cultural Competence The Contractor is to develop a plan to educate, monitor and evaluate the cultural appropriateness of outreach and health care interventions.

Contract Limitations: Subject to requests for services, the Contractor is obligated to provide health care services to eligible residents up to the value of health care services specified in the Contract. 

Maintenance of Effort: The Contractor and subcontractors are required to maintain their current level of services to uninsured District residents as a condition of receiving compensation through this Contract.

Financial Protections: The Contractor is obligated to maintain a performance bond equivalent to two months of payments under the Contract. In addition, funds advanced by the District will be maintained in a segregated account and are only to be disbursed for the purposes specified in the Contract. Contractor is to indemnify the District for Contractor's negligent acts. Standards have been established for timely payment of subcontractors.

Reporting Requirements: The Contractor is required to provide monthly, quarterly, and annual reports regarding volume, costs, quality, and access to services, as specified by the District.