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D.C. Agrees to Settle With Chartered Health for $48 Million

Wednesday, July 24, 2013

D.C. Agrees to Settle With Chartered Health for $48 Million

A judge and federal Medicaid agency must still approve the deal before the Medicaid insurer’s health-care providers will begin seeing payment.
The official overseeing the receivership of D.C. Chartered Health Plan Inc. and the District’s Department of Health Care Finance agreed to settle for $48 million claims that the District under-reimbursed Chartered.  
 
The settlement is subject to approval by the D.C. Superior Court and authorization by the federal Centers for Medicare & Medicaid Services. 
 
Chartered, once the District’s largest Medicaid insurer, had filed claims with the District for more than $60 million, saying the department had under-reimbursed it for providing HIV/AIDS drugs to patients and for other medical and dental care.  
 
The settlement agreement says the parties reached this agreement “in order to avoid the delay, uncertainty, inconvenience and expense of protracted litigation of the claims asserted or that could have been asserted by Chartered….”
 
The settlement is intended to resolve all Chartered’s claims, including claims it had not yet filed.  The District denies all Chartered’s claims.  The settlement agreement states that it is “neither an admission of liability nor a concession by the District.”
 
The settlement agreement provides that the entire $48 million settlement will be used to pay what Chartered owes the medical-care providers who treated its clients.
 
Chartered estimates it owes hospitals, clinics and doctors more than $50 million for undisputed claims.  Chartered intends to set aside funds already in its bank accounts for disputed claims, the largest of which is with MedStar Health, the large regional not-for-profit chain of hospitals and doctors’ offices.
 
A Superior Court judge supervising the receivership must now determine whether the agreement can be approved. The rehabilitator appointed to oversee the receivership has filed the agreement with the court and soon will file a motion requesting the judge approve it. The next court hearing is scheduled for Aug. 21, but the court may schedule another hearing sooner. 
 
If the judge and the federal Centers for Medicare & Medicaid Services approve the agreement, Chartered could begin paying doctors, clinics and hospitals shortly afterward. The District intends to administer its payments through a grant program; the details will come from the D.C. Department of Health Care Finance.
 
Chartered was by far the largest of the city’s handful of Medicaid insurers, covering more than 100,000 of the District’s poorest people, before it ran into financial troubles and was taken into receivership.
 
The receiver sold most of Chartered’s assets to AmeriHealth Group of Companies headquartered in Philadelphia, which operates as AmeriHealth Caritas here, transferring the 100,000 enrollees from Chartered to AmeriHealth with no interruption in their health care.
 
However, Chartered began to run out of money in April as its contract ended and just before the deal with AmeriHealth closed, and Chartered suspended claim payments to hundreds of doctors, hospitals, clinics and other providers.
 
The rehabilitator, William P. White, commissioner of the Department of Insurance, Securities and Banking, assumed three major responsibilities when he took over the company in October: Ensuring that Chartered’s vulnerable clients continued to get health care; that Chartered receive fair value for its claims against the District; and that providers be fairly reimbursed.
 
“We’ve already concluded a complicated sale to AmeriHealth in record time and seamlessly transitioned Chartered’s clients with no interruption of care,” said Commissioner White. “Now this settlement goes a long way toward meeting our second obligation, receiving fair value for Chartered’s claims, and our third, paying the providers what they are owed.” 
 
To view the notice filing and other related documents, visit disb.dc.gov/chartered.