Health care providers who have seen their bottom lines damaged by the collapse of D.C. Chartered Health Plan could be made whole by summer’s end under a plan detailed Thursday by city officials.
Wayne Turnage, the District’s health care finance director, said he has reached an “agreement in principle” with Chartered’s receiver to settle a dispute over Medicaid reimbursement rates for roughly $18 million. That sum would contribute toward the $47.5 million that the troubled former city health care contractor is currently estimated to owe providers.
Turnage said he expects the federal government to pay its usual 70 percent share of the $18 million rate settlement. And Mayor Vincent C. Gray (D) is prepared to pay the remainder out of the District’s contingency fund, Turnage said — meaning city taxpayers could ultimately be on the hook for roughly $35 million to settle the accounts of businessman Jeffrey E. Thompson’s once-thriving firm.
The receiver, Daniel L. Watkins, acknowledged a tentative agreement Thursday afternoon but declined to discuss details ahead of a formal announcement from the city.
The health care providers — which range in size from hospitals owed several million dollars to small practices owed a few thousand — could see initial payments next month from the receiver. The balance of the funds would be made available by August through the Department of Health Care Finance, he said, with providers required to sign a release to secure payment.
While the plan makes good on a promise made by Gray earlier this year to get quick relief for front-line health providers, it could prove politically treacherous as the mayor ponders a re-election bid. The perception that it represents a taxpayer bailout for Thompson, subject of an accelerating federal corruption investigation, is likely to provide fuel for Gray’s political foes.
Update, 6:15 p.m.: As you might expect, how you view this deal much depends on where you sit.
For Bob Malson, president of the D.C. Hospital Association, whose members are owed a combined $27.5 million, the announcement was worthy of high praise. “We’ve been asking the mayor and Wayne to do this for quite a while now,” he said. “We think the mayor did absolutely the right thing.” Maria Gomez, founder and chief executive of Mary’s Center, one of the city’s largest clinics for low-income residents, said she was “thankful” the money was coming through, saying her clinic could not afford to lose the nearly $200,000 Chartered owed.
“This kind of money is a month’s worth of utility bills that must be paid to keep our doors open,” Gomez said.
D.C. Council member David A. Catania (I-At Large), on the other hand, described himself as “galled” by the whole thing — particularly, he noted repeatedly, a day after the Gray administration opposed his attempts to redirect roughly $35 million in funding to poor public school students. “We’re going to deprive the kids of the additional resources they need in education in part to Jeff Thompson whole,” he said.
Catania renewed calls for the District to file suit against Thompson. The receiver filed a $17 million claim against him in May, but Catania wants Attorney General Irvin B. Nathan to “pursue relentlessly Jeffrey Thompson’s personal assets and those who benefited from illegal expenditures from Chartered” — entities, he noted, that may well include Gray’s 2010 campaign.
Update, 6/28, 10 a.m.: Says Gray spokesman Pedro Ribeiro in response to Catania: “Mr. Catania is either a fool or a liar. None of the money will go to Chartered; it will only go to the providers.” He also noted that Nathan has already indicated his willingness to sue Thompson directly.