The District of Columbia has reached a settlement with a health-care company that was once the city’s largest contractor and whose former owner is at the center of a federal investigation into political corruption.
District officials have agreed to pay $48 million to settle the accounts of D.C. Chartered Health Plan, the Medicaid contracting firm that unraveled over the past year amid financial stresses and allegations concerning its owner’s involvement in the 2010 mayoral election.
The settlement, between the company’s receiver and city health-care finance officials, awaits the approval of federal Medicaid officials. But when a Superior Court judge signed off on the deal Wednesday, it marked a significant step toward releasing funds to health-care providers who say they have not been paid for $56.5 million in services delivered to Chartered members.
“We’re very, very, very happy,” said Maria Gomez, the president and chief executive of Mary’s Center. Chartered owes the family-focused nonprofit group more than $300,000, Gomez said, and the center is behind on its rent and payments to vendors as a result.
Gomez added: “It’s money that has been due to us for so long now. . . . If we don’t get paid, we can’t continue to see these patients.”
Chartered’s founder and former owner, Jeffrey E. Thompson, is under investigation by a federal grand jury because of allegations that he financed a “shadow campaign” of unreported expenditures on behalf of Democrat Vincent C. Gray’s successful run for mayor three years ago.
Thompson’s attorney, Brendan V. Sullivan, has repeatedly declined to comment on the campaign allegations, and Gray has denied any wrongdoing.
Much was at stake in the election for Thompson and Chartered, which did more than $300 million a year in city business at its peak.
The company, which served more than 100,000 low-income District residents, came under increasing scrutiny in the years leading up to 2010. An audit found that Chartered had overpaid firms owned in whole or part by Thompson, identifying $7.7 million in payments to Thompson-owned companies as “excessive.” The city sued, and Thompson paid $12 million to settle.
After Gray’s election, Chartered’s position improved, with the new administration agreeing to pay Chartered $7.5 million to settle another contract dispute.
Wednesday’s ruling by Superior Court Judge Melvin Wright brings Chartered’s business dealings with the District — and the company’s existence — closer to an end. Less clear is whether Chartered’s problems and their effect on providers will have a chilling effect on providers’ willingness to serve lower-income District residents.
“This sends a clear message to our providers that they are not only important to the beneficiaries they serve but that they are considered an integral part in the system that contributes to the health and well-being of the District’s most vulnerable population,” said Wayne Turnage, director of the city’s Department of Health Care Finance.
Gomez, of Mary’s Center, said that letting the obligations go unmet for so long hurt the city’s entire health-care system. “We always get a bad rap in the city, that people don’t want to do business in the city because they don’t get paid,” she said. “So this is very smart, to get this money out.”
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