It appears one of the best-known names in D.C. health care has less than a month to live.
The District’s health-care finance department announced today that the AmeriHealth Mercy Family of Cos. will assume operations of D.C. Chartered Health Plan on May 1. The plan, serving low-income residents eligible for Medicaid and other government health programs, will be doing business as “AmeriHealth District of Columbia,” according to company spokeswoman Michelle Davidson.
AmeriHealth will inherit Chartered’s customer base of more than 100,000 District residents, finishing out Chartered’s current contract with the city before AmeriHealth is anticipated to start its own contract July 1.
The announcement marks the likely consummation of a $5 million transaction arranged by a government receiver, a deal that has been in the works for more than six weeks and is “on track to close by the end of the month,” according to a statement from city insurance regulators. It also marks the likely end of the Chartered brand, which was established in the city in the 1990s then brought to prominence and, later, dominance after it was acquired by businessman Jeffrey E. Thompson in 2000.
Chartered’s fate has been intertwined with Thompson’s over the past 13 months, since he was first implicated in a federal investigation of campaign finance wrongdoing. As Thompson has fought with prosecutors over their search of materials seized from his home and offices last year, Chartered came under the scrutiny of insurance regulators last year, culminating in a government takeover of the firm in October.
Lawyers for Thompson went to court attempting to block the sale of Chartered’s most valuable assets — its customer base, its provider relationships and its name — but a judge rejected his claims last month. The litigation is ongoing, but a Superior Court judge this week declined to hold up the sale while Thompson’s lawyers press further appeals; attorney David B. Killalea declined to comment Friday.
AmeriHealth Mercy, a Philadelphia-based company operating in 13 states, was one of three firms that were awarded Medicaid managed care contracts by the city this month. The awards must still be approved by the D.C. Council. In a statement, AmeriHealth president and CEO Michael A. Rashid said the firm intends to “work hard to ensure continuity for our members and providers.”
While AmeriHealth will assume responsibility for paying member bills incurred after May 1, it remains unclear whether or how health providers will be paid for services rendered before then, given the precarious state of Chartered’s books. Come May 1, Chartered will no longer receive payments from the District, leaving only the $5 million in sale proceeds and various other illiquid assets to pay an expected $45 million in leftover claims.