The Washington Post
Navigation Bar
Navigation Bar

Related Items
On Our Site
  • Key Issues Page
  • Main Legislative Page

  •   Insurance Chief Urges Md. To Curb Payments to HMO

    By Charles Babington
    Washington Post Staff Writer
    Thursday, April 2, 1998; Page D07

    Maryland's insurance commissioner said yesterday that state payments to Lanham-based PrimeHealth Corp. should be suspended or placed under state control because the managed care company has not provided adequate answers to questions about its debts and ownership.

    Commissioner Steven B. Larsen asked the state health department to withhold further Medicaid reimbursements to PrimeHealth or to place them in "a supervised bank account" that essentially would give the state control over how the company uses its money. In a letter to PrimeHealth, Larsen said he continues to worry "about possible fraudulent conveyances" of valuable medical equipment that was crucial to PrimeHealth's start-up in 1996.

    The letter was the latest blow to the Prince George's County health maintenance organization, which has found itself at the center of controversy since its name surfaced in connection with federal and state probes of former state senator Larry Young (D-Baltimore).

    Young, who was expelled from the Senate in January, was one of several state politicians who lobbied the state government in 1996 and 1997 to include PrimeHealth in a new state program to enroll Medicaid members in managed care plans. Investigators are looking into payments the company made to a religious rally sponsored by Young, payments the company has said were made in an effort to be a good corporate citizen.

    At Larsen's request last month, the health department delayed payment of nearly $2.5 million to PrimeHealth, and an official said that money would continue to be held for the time being. PrimeHealth officials previously had said they would not agree to a supervised bank account. They would not answer questions yesterday about Larsen's latest letter.

    In reviewing PrimeHealth's hard-fought battle to obtain a state insurance license in 1996, Larsen has questioned the truthfulness of affidavits filed by the company. PrimeHealth last week acknowledged that its primary owner is radiologist Christian E. Chinwuba, who was not identified as owner in those affidavits. Another Chinwuba company, Diagnostic Health Imaging Services, was more than $6 million in debt when he shifted its most valuable medical equipment to PrimeHealth.

    Larsen has said Diagnostic Health's creditors might make legal claims against PrimeHealth's assets to settle those debts.

    In his letter yesterday, Larsen said PrimeHealth has been "completely inconsistent" in its explanations of Diagnostic's debts and their possible effect on PrimeHealth.

    Noting that PrimeHealth has settled more than $1.6 million of Diagnostic's debts in recent weeks, Larsen wrote: "I am concerned that PrimeHealth may be using Medicaid funds to pay the debts of an unrelated, unlicensed corporation."

    © Copyright 1998 The Washington Post Company

    Back to the top
    Navigation Bar
    Navigation Bar