Chartered could owe D.C. health providers $85 million


Jeffrey Thompson speaks at a ceremony remember Dorothy Height in April 2010 . (C-SPAN2 via Associated Press)
April 19, 2013

The city’s doctors, clinics and hospitals could be owed a combined $85 million from the soon-to-be-defunct D.C. Chartered Health Plan, and it remains unclear how the once-dominant city health contractor will be able to pay the vast majority of those claims.

Chartered receiver Daniel L. Watkins said Friday that the firm was suspending payment to care providers effective immediately while he gathers all outstanding claims and marshals the company’s assets. He declined to give a timeframe for when providers can expect payment.

The $85 million figure, which is about double previous estimates of Chartered’s potential liabilities to providers, represents about $60 million in Medicaid claims that have been incurred but have yet to be paid. An additional $25 million could be owed to providers due to litigation — likely related to a pending battle between Chartered and the MedStar hospital chain.

The company has liquid assets of $13 million to $16 million, Watkins reported, including $5 million in expected proceeds from the sale of Chartered’s network and client base to AmeriHealth Caritas. That transaction is on track to close before month’s end, Watkins said.

Still unresolved are whether Chartered will be successful in a $60 million claim against the city alleging that it was underpaid for services rendered, and whether it will be able to seize $13 million more in loan collateral.

Also up in the air is whether the company’s titular owner, Jeffrey E. Thompson, can be compelled to reimburse the firm for a $4 million income tax refund that, according to Watkins, was kept on the books of Thompson’s parent company rather than properly being passed on to Chartered.

Thompson has been implicated in funding a $654,000 unreported “shadow campaign” in support of Vincent C. Gray’s 2010 mayoral bid. Thompson has not been charged and has not commented on the ongoing investigation

One influential D.C. Council member, David A. Catania (I-At Large), has suggested that Watkins and the city seek to hold Thompson personally liable for any of Chartered’s unpaid liabilities. Attorney General Irvin B. Nathan said this week that it remains a possibility.

The upshot for health-care providers is that they might be seeing a hole in their accounts receivable for months, if not longer, and that the hole might never be completely filled.

K. Edward Shanbacker, executive vice president of the Medical Society of the District of Columbia, said he has not heard explicit concerns about Chartered from the society’s members. But he noted that medical practices in the city can operate on thin margins.

When the city last year sought an $11 million Medicaid reimbursement from health providers, Shanbacker said, doctors responded fiercely to beat back the proposal. “If $11 million was going to cause that severe a disruption, one has to believe that $85 million is going to cause that times X,” he said.

William P. White, the city’s insurance commissioner, urged forbearance from providers Friday. “We would like for them to be patient and give us time to work through this,” he said. “I would say that patience is kind of a watchword right now.”

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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