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Judge Approves Crucial Settlement in Chartered Health Plan’s Receivership Proceedings, Clearing the Way to Paying Hundreds of Creditors

Wednesday, August 21, 2013
A D.C. Superior Court judge Wednesday approved a $48 million settlement between the District’s Department of Health Care Finance and DC Chartered Health Plan Inc., once the District’s largest Medicaid insurer but now in receivership.
That critical decision by Judge Melvin R. Wright means the doctors, hospitals and pharmacies Chartered owes approximately $60 million will be reimbursed to a great extent starting in September.  
A separate out-of-court agreement of $8.4 million to settle Chartered’s single largest claim, by MedStar Washington Hospital Center and MedStar Georgetown Medical Center, remains to be submitted for approval to another judge in a separate court proceeding. 
In July, Chartered settled first with the Department of Health Care Finance, which Chartered claimed owed it more than $60 million in unreimbursed medical costs, primarily for providing HIV/AIDS medications. The department settled for $48 million, all of which will go to providers. 
In August, Chartered settled with the two District hospitals, part of MedStar Health’s not-for-profit regional network of 10 hospitals and health-care businesses. They had alleged Chartered owed them $30 million. The $8.4 million settlement will come from Chartered’s own accounts, not from the settlement with the Department of Health Care Finance, but will be paid to creditors in the same proportion as the other settlement. 
“We’re in the home stretch,” 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 in October. “We still have a lot of work, but at least the providers will know they’ll be paid the lion’s share of what they’re owed. We’ve come a long way since October.” 
Chartered Health, once one of the District’s largest contractors, insured more than 100,000 Medicaid clients until it ran into financial troubles. Chartered suspended payments to its hundreds of health-care providers in April. 
That month the rehabilitator sold most of Chartered’s assets to the AmeriHealth Group of Companies headquartered in Philadelphia, which now 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.
The rehabilitator is still seeking millions of dollars he alleges Chartered’s parent company owes Chartered. The parent is owned by District businessman Jeffrey E. Thompson.
To view documents related to Chartered, visit disb.dc.gov/chartered.