Jeffrey Thompson loses bid to derail D.C. Medicaid contracts

Thompson is running out of legal options. (C-SPAN)

I reported Tuesday that lawyers for Jeffrey Thompson’s D.C. Healthcare Systems Inc. — the corporate parent of Chartered Health Plan, now under city receivership — had moved to stop the sale of Chartered’s most valuable assets. Today, Thompson’s company lost a separate bid to cancel the city’s ongoing effort to award new Medicaid contracts worth hundreds of millions of dollars.

Lawyers representing D.C. Healthcare Systems Inc., also known as DCHSI, argued in a December contract protest that the city acted unfairly — first, by the Chartered receiver’s decision not to bid to renew the company’s Medicaid contract, and second, though the receiver and his lawyers’ alleged conflicts of interest.

The Contract Appeals Board ruled Wednesday that it had no jurisdiction to settle the dispute, because DCHSI’s objections had to do with the receiver, not with procurement officials, and Thompson’s company presented no evidence to suggest that the receiver had colluded with them to keep Chartered out of the process. Furthermore, the conflict of interest allegations — which include the fact that receiver Daniel L. Watkins and lawyers from Faegre Baker Daniels have worked in the past for other Medicaid managed care firms that are likely bidders on the D.C. contracts — are well outside of the Contract Appeals Board’s jurisdiction, administrative law judge Monica Parchment wrote.

DCHSI has also protested that it was not allowed to submit its own bid for the city’s Medicaid business, separate from Chartered, but Parchment found that the company didn’t have standing to protest on those grounds, either.

“Essentially, it appears to the Board that [DCHSI] learned too late that Chartered was not going to bid for the contract, and once it learned this fact, the District’s deadline for submission of proposals had passed,” Parchment wrote. “In short, these facts indicate … that [DCHSI] clearly had no original intention to bid on the contract before it later learned that Chartered had not submitted a proposal.”

The board’s decision means that Thompson’s last hope for maintaining his health-care business lies in D.C. Superior Court, where he is hoping to stop, or at least slow down, the city’s move to sell the core of Chartered’s business. The sale is predicated on the buyer, the Philadelphia-based AmeriHealth Mercy Family of Cos., winning a contract under the process Thompson had challenged.

Contract awards are expected to be announced early next month, and a court hearing on the proposed dale is set for Friday afternoon, according to a spokesman for D.C. insurance department.

Sunday is the first anniversary of the federal raids on Thompson’s home and offices, which placed the once-prominent businessman and political power player under close scrutiny. In July, he was implicated in financing a $650,000 unreported “shadow campaign” effort to elect Mayor Vincent C. Gray. He has not been charged with a crime.

Mike DeBonis covers Congress and national politics for The Washington Post. He previously covered D.C. politics and government from 2007 to 2015.

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Mike DeBonis · February 27, 2013