Plan coming for unpaid Chartered Health claims, Gray says

April 25, 2013
Accountants are poring over the corporate records of Chartered, headquartered at 15th and L streets NW. (Mike DeBonis/The Washington Post)
The city may have to make health providers whole after the collapse of Chartered, headquartered at 15th and L streets NW. (Mike DeBonis/The Washington Post)

Not quite a week after it was announced that D.C. Chartered Health Plan could owe tens of millions more than previously anticipated to city health-care providers, Mayor Vincent C. Gray said Thursday his administration is “developing a plan to provide relief.”

Chartered Health Plan is currently the city’s largest Medicaid contractor, handling the care of more than 104,000 District residents. But next week, the company’s contract will end, and its enrollees will be transferred to another firm, AmeriHealth Caritas, that is purchasing Chartered’s assets.

The problem is that services have been rendered to Chartered enrollees in recent weeks, but providers have yet to be paid for those claims. And after the contract ends, Chartered won’t have any city money coming in to pay those bills, and the firm, at least presently, doesn’t have enough hard assets on its books to cover the unpaid claims.

Last Friday, the company’s receiver estimated those unpaid claims could amount to as much as $60 million, with the firm holding another $25 million in expected liabilities related to litigation. The company has liquid assets of only $13 million to $16 million; whether it can make providers whole depends largely on if it can win a fight with the city over whether it was underpaid in past years.

The receiver suspended all payments to providers Friday. The prospect of having huge sums sitting unpaid on their books have made the city’s doctors, clinics and hospitals nervous, and Gray’s pledge is meant to calm those nerves.

Gray did not detail what his plan might entail, except to say it would provide “relief to those health care providers in Chartered’s network that have unpaid claims, will not be able to sustain large losses, and serve a high proportion of Medicaid patients or deliver high levels of uncompensated care.”

Deputy Mayor for Health and Human Services Beatriz “B.B.” Otero is developing the plan in consultation with federal Medicaid officials, Gray said in a statement. Details, he said, “will be shared in the coming weeks.”

Chartered has been in city receivership since October. Its sole owner, Jeffrey E. Thompson, has been implicated in funding a $654,000 unreported “shadow campaign” in support of Gray’s 2010 mayoral bid. Thompson has not been charged and has not commented on the ongoing investigation.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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Mike DeBonis · April 25, 2013