A brand-new health-care firm won the D.C. Council’s approval Tuesday to do $542 million in Medicaid business with the city, but not before a legislator accused one of the company’s owners of committing perjury by not making required disclosures to insurance regulators.
The D.C. contract will be the first source of business for Thrive Health Plans, co-owned by Detroit-area native Thomas M. Duncan II and Los Angeles lawyer Dennis S. Ellis. The firm’s upstart nature, out-of-town ownership and high ranking from city contract evaluators raised eyebrows among council members, most prominently Vincent B. Orange Sr.
Orange (D-At Large) amplified his earlier concerns on the council dais Tuesday, accusing Duncan of perjuring himself by not disclosing criminal offenses on forms submitted to insurance regulators in the course of seeking licensing for Thrive. Orange also accused Thrive of not making a timely required $300,000 deposit with the city and noted that Thrive’s chief medical officer had been associated with a managed-care firm that had its District insurance license suspended in 2000.
“The question here today is one of disclosure and honesty,” he said. “It’s never what you do, it’s when you cover up. These statements were [under the penalty] of perjury, and perjury is a felony crime.”
Duncan said in an interview last week with The Washington Post that city insurance examiners were made fully aware of his three misdemeanor offenses — a 2000 arrest for underage possession of alcohol and disorderly conduct, when Duncan was 20 and attending college, and a 2004 charge for a bounced check totaling less than $150.
The Department of Insurance, Securities and Banking said in a statement Monday that it saw “no reason to change its licensing decision” on Thrive and that Orange’s concerns “were raised and evaluated at the time of the application.” Also, the directors of three city departments defended the contract award, including its high ranking by a city procurement panel and the propriety of the licensing process, in a letter delivered to Orange Monday.
Yvette M. Alexander, chairman of the council’s Health Committee, disputed Orange’s claims, saying they “have all been vetted” and that the insurance department “was aware of all of that.”
“We’re jeopardizing the health care of over 200,000 residents” by delaying the contract, she said. “They deserve as much choice as we have with our health care coverage.”
Orange at one point proposed that the council convene an executive session to review and discuss confidential Thrive documents — a rare, perhaps unprecedented maneuver that would have required clearing the council chamber of all but members and essential staff. But colleagues balked at closing the meeting to the public and voted down Orange’s motion 11-1.
“If you feel that a person from California and a person from Michigan can just pop into town and in just seven months receive a half-a-billion-dollar contract in the District of Columbia … that’s a question for you,” Orange said before the final vote. ”I can look at myself in the mirror because I did the due diligence.”
In the end, Orange won “no” votes from colleagues Anita Bonds (D-At Large), Muriel Bowser (D-Ward 4), and Jim Graham (D-Ward 1). But seven, including Alexander and Chairman Phil Mendelson (D) voted yes, enough to secure approval. David Grosso (I-At Large) voted present, reflecting his opposition to the council’s practice of reviewing contracts. Marion Barry recused himself from voting on Thrive, he confirmed, because the woman who donated him a kidney in 2009, Kim Dickens, is working for the firm.
In a statement, Duncan said Thrive is “excited and proud” to be selected and touted its “all-star team of professionals” with experience with the District’s Medicaid program. “We look forward to getting started,” he said.