A proposed $10.2 million settlement with the city’s largest Medicaid contractor has been put on ice.

Ink never met paper on the proposed agreement with Chartered Health Plan announced by Mayor Vincent C. Gray’s administration last week. On Thursday, Health Care Finance Director Wayne Turnage told D.C. Council members that Attorney General Irvin B. Nathan’s office would “independently reevaulate the basis for the settlement” and possibly renegotiate its terms.

Turnage added in his testimony that the settlement costs were no longer being figured in as a portion of a $32 million rate increase for managed care providers, of Chartered is the largest, bringing those costs down to about $30 million.

The settlement would end a current case before the city’s Contract Appeals Board. Chartered says the District owes it $14.9 million for failing to pay enough for dental care it was asked to provide several years ago. The District moved to dismiss the claim on procedural grounds, and the board had yet to rule when Turnage said last week he had reached a settlement.

That news raised the ire of David A. Catania (I-At Large), chairman of the council’s health committee, who considered the payout a retroactive rate increase. The dental costs, he argued, had been figured in to the contractual rates Chartered had previously agreed to.

Catania said Thursday he was pleased that the Gray administration would “take a pause” on the settlement. He said that he would indefinitely postpone a hearing on the settlement he had scheduled for Monday.