D.C.’s Medicaid upheaval puts health-care providers in a tight spot

Bill O'Leary/The Washington Post - Dr. Gloria Wilder follows up on patient Steven Osborne, 4, who was sent to the emergency room the day before for dehydration.

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The letter faxed to Gloria A. Wilder’s Anacostia medical practice was short and to the point: D.C. Chartered Health Plan, the Medicaid contractor that insured roughly three-fourths of her patients, would no longer be paying its claims, effectively immediately.

That meant Wilder would not be getting paid anytime soon for hundreds of office visits she had already handled, as well as dozens more she had scheduled for the coming week.

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“The breath got sucked out of me,” she said of the April 19 letter. “Here it was, payroll day, and you hear no money’s coming.”

Until this month, Chartered Health Plan was the city’s dominant Medicaid contractor, managing the health care of more than 100,000 low-income city residents. The company’s collapse has raised questions about its politically connected owner, its precarious finances and government oversight of a key component of the city’s health-care system. But for small medical providers, Chartered’s demise has presented a more urgent question: How to make ends meet?

Wilder said that Chartered owes her practice, Core Health and Wellness, about $45,000, that she has cut back hours to save on utility bills, and that she’s been forced to dip into her retirement account to make payroll in recent weeks. “We run a fiscally sound practice, but it still means you need to have revenue coming in,” she said.

The D.C. government has promised that help is on the way, but pending litigation and negotiations with federal Medicaid officials have greatly complicated the task of making providers whole.

Chartered’s messy dissolution is an outgrowth of legal and financial troubles besetting Jeffrey E. Thompson, the firm’s owner. Thompson was thrust into the public spotlight last year after being implicated in the financing of a “shadow campaign” that supported Vincent C. Gray’s successful 2010 run for mayor. As Thompson became associated with political corruption, his health-care firm edged toward a financial precipice, and insurance regulators forced the company into receivership in November.

Thompson is the subject of a federal grand jury investigation, but he has not been charged with a crime. His attorneys have declined repeatedly to comment on the probe or on Chartered’s problems.

This year, receiver Daniel L. Watkins sold Chartered’s subscriber rolls and other assets to AmeriHealth Caritas, a Philadelphia company that assumed responsibility for Chartered’s members as of May 1 and is poised to start a new contract with the city in July. But the proceeds from the sale were not nearly enough to cover the leftover claims.

$60 million owed

Watkins estimates that the company owes providers at least $60 million for services rendered to Chartered enrollees. About 70 percent of that figure, Watkins said, is owed to hospitals, with large clinics and practices accounting for nearly all the rest.

Small practices such as Wilder’s are owed only a sliver of the total, but their survival is most threatened by the company’s decision to freeze payments in the final days of its contract. Meanwhile, larger providers are nervous that what is, for them, still a manageable problem could grow into something more serious if a resolution isn’t found soon.

Christopher A. Warner, an obstetrician-gynecologist who practices in Northwest Washington’s West End neighborhood, said the Chartered crisis has put a nearly $100,000 hole in his practice’s books. He blamed not only the April 19 payment freeze but also a slowdown in payments before the freeze.

Warner, who was treating about 130 pregnant women covered by Chartered when payments were halted, said he has stopped taking new Medicaid patients. He has also stopped paying salaries to himself and his wife, the office manager, and they have been negotiating with vendors for payment extensions.

Wilder and Warner say they feel betrayed by government officials. They say officials talk about expanding primary care to the District’s poorest residents but have allowed front-line providers to bear the brunt of the Chartered debacle.

“We decided a long time ago that we wanted to take care of all patients, whether it be by Medicaid or private-payer [insurance] — that was our focus,” Warner said. “But things have been harder and harder to maintain.”

Until Warner closed his office at Ward 8’s United Medical Center this year, he was the only obstetrician-gynecologist in private practice east of the Anacostia River. He remains one of a very few private OB-GYNs anywhere in the city who accept Medicaid patients, and those patients account for about 55 percent of his practice.

Wilder said the current upheaval helps explain why so few private doctors serve the city’s low-income communities and why most residents of those communities are treated at community clinics and emergency rooms.

“We’re here because we chose to be here,” said Wilder , who held high-level positions at Georgetown University Medical Center and Children’s National Medical Center before opening her practice.

“We could leave at any moment and make four times what we’re making, but we’re choosing to stay because this is the right thing. There’s a need here, and it’s real and it’s palpable.”

Obstacles to relief

It is not clear whether Warner or Wilder will see relief soon. A week after the April 19 letter was sent, Gray (D) issued a statement saying he would “be taking steps to protect the District’s health care provider network,” focusing on providers who would “not be able to sustain large losses.”

But in the ensuing month, no additional plans have been announced. Mayoral spokesman Pedro Ribeiro said last week that officials are “working with both the providers and CMS on a solution,” referring to the federal Centers for Medicare and Medicaid Services, but he declined to elaborate.

According to city officials who were not authorized to speak publicly and provider representatives who have attended meetings on the matter, a satisfactory resolution hinges on the outcome of a dispute over whether the city paid Chartered unfairly low rates from 2010 to 2012. Chartered is seeking $60 million, enough to make good on most of the unpaid claims; the city has proposed settling for about $18 million, in which case providers could receive less than 30 cents of every dollar owed.

Also at issue is whether CMS will agree to chip in the usual 70 percent federal share of any future payment to Chartered. D.C. officials are waiting for a decision, because if the city were to pay providers directly, it would likely forfeit any chance of federal reimbursement. But CMS is unlikely to contribute until the rate dispute is settled, something that may not happen for months.

Larger providers appear anxious — though not in a panic — about unresolved claims. The city’s hospitals, owed tens of millions of dollars combined, “provided care to the patients, and they all deserve to be paid,” said Robert Malson, president of the D.C. Hospital Association. Malson added that “if something is not done soon, some will have to take drastic measures in order to survive.”

Unity Health Care, the city’s largest chain of clinics serving low-income communities, has a hole approaching $1 million, said Vincent A. Keane, the nonprofit group’s president and chief executive. That amounts to a “cash- flow issue” in the context of a $100 million budget, he said, “but to have a million dollars of receivables with one vendor, that’s pretty significant. . . . Ultimately, you have to find it somewhere.”

For the smaller providers, the missing payments are a matter of greater urgency. Warner said the upheaval could force him to close his practice. Wilder said the payment freeze has posed some hard questions for her practice: Should a 5-year-old girl with early-onset puberty delay critical hormone injections until her AmeriHealth coverage begins? Should a new mother wait a week before bringing her baby in for a postnatal checkup?

“That’s why a lot of providers stop taking Medicaid,” Wilder said. “For me, I’m not going to stop. . . . The reason I went into medicine was to serve this community. But I’m going to speak. We’re not going to stand silent and watch this crumble.”

 
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