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Chartered Health Resolves Large Claim Dispute With MedStar Washington Hospital and MedStar Georgetown Medical Center

Friday, August 16, 2013
Settlement clears another big obstacle to paying Chartered’s creditors.
DC Chartered Health Plan Inc. has resolved the largest claim against the company, which is in receivership. 
MedStar Washington Hospital Center and MedStar Georgetown Medical Center alleged they were owed as much as $30 million in disputed claims. The two parties settled at $8.4 million rather than spend more months in arbitration.
The two hospitals are part of MedStar Health’s not-for-profit regional network of 10 hospitals and other health-care businesses operating in the District and Maryland.
“We’re very pleased we could settle the dispute with Washington Hospital and Georgetown Medical Center once and for all,” said William P. White, commissioner of the District’s Department of Insurance, Securities and Banking, who became the court-appointed rehabilitator after the regulatory agency took Chartered into receivership. “Ultimately we reached a compromise that avoided a prolonged arbitration. This removes a major obstacle to implementing a proposed settlement between Chartered and the District and to making payments to Chartered’s health-care service providers.” 
Chartered Health, once one of the District’s largest contractors, insured more than 100,000 Medicaid clients until it ran into financial troubles and the Department of Insurance, Securities and Banking placed it into receivership in October. Chartered suspended payments to its hundreds of health-care providers in April. 
Chartered will pay the two hospitals’ disputed claims of $8.4 million from its own assets. MedStar’s claims not in dispute, totaling $9.6 million, will be paid through a $48 million settlement with the District along with the undisputed claims of other medical providers.
The District agreed in July to settle for $48 million Chartered’s claims that the District had under-reimbursed it by $60 million for medical services. 
A D.C. Superior Court judge must approve the agreement with MedStar Washington Hospital and MedStar Georgetown Medical Center and the separate agreement with the District. The next hearing on the progress of the receivership is scheduled for Aug. 21. 
In April the rehabilitator sold most of Chartered’s assets to AmeriHealth Group of Companies headquartered in Philadelphia, which operates as AmeriHealth Caritas here. The rehabilitator transferred the 100,000 enrollees from Chartered to AmeriHealth with no interruption in health care for some of the District’s poorest and most vulnerable residents.
To view documents related to Chartered, visit disb.dc.gov/chartered