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Mayor Vincent C. Gray to Address Issue of Unpaid Health Care Claims for the District's Medicaid Providers

Thursday, April 25, 2013
Goal is to protect providers that serve large share of Medicaid beneficiaries

Contact: Dorinda White, (202) 727-9226

Today, Mayor Vincent C. Gray announced that his administration is developing a plan to provide relief to certain health care providers who face potentially impactful losses due to the inability of DC Chartered Health Plan (Chartered) to pay their health care claims. On October 19, 2012, the Board of Directors for Chartered agreed to place the firm into voluntary receivership due to a depletion of the company’s reserve fund and growing financial problems. Under the auspices of the Department of Insurance, Securities and Banking (DISB), Chartered continued to provide services to beneficiaries and payments to health care providers with the company in receivership. However, the Receiver announced on April 19, 2013 that Chartered would no longer pay outstanding claims. According to the report, Chartered’s unpaid liabilities could be in the range of $45 to $60 million.

“In light of the financial problems of Chartered, I will be taking steps to protect the District’s health care provider network that has taken years for us to develop. My primary goal is to protect the stability of the community-based providers that will be at risk of closing their doors and turning away patients if there is a significant delay in being paid,” said Mayor Gray. “Accordingly, I have directed Deputy Mayor for Health and Human Services BB Otero to work with the Department of Health Care Finance (DHCF) to develop a plan that provides relief to those health care providers in Chartered’s network that have unpaid claims, will not be able to sustain large losses, and serve a high proportion of Medicaid patients or deliver high levels of uncompensated care.”

Because the Medicaid program is jointly administered through a state-federal partnership, the District must ensure that any plan developed complements federal regulations governing Medicaid managed care programs. DHCF is working with the Centers for Medicare and Medicaid Services to ensure that efforts to provide relief to the provider community do not violate existing regulations.

Details concerning the administration’s plan to mitigate the impact of Chartered’s unpaid claims are still being formulated and will be shared in the coming weeks.

Chartered was the District’s largest Medicaid insurer, providing managed care services to more than 104,000 members. For additional information on the receivership status and sale of Chartered assets, please visit disb.dc.gov/chartered.