Washington, D.C.-based Chartered Health Plan has been taken over by city officials amid concerns of financial irregularities regarding the Medicaid managed care company.
The commissioner of the D.C. Department of Insurance, Securities and Banking, William White, now controls the embattled insurance company and will search for a new buyer, reported The Washington Post.
"By taking the company into receivership ... it's a little bit easier to clarify their overall financial situation," White said. "It gives them sort of a fresh start in terms of what they look like to a potential buyer."
Chartered, which is the city's largest Medicaid contractor, has been on D.C. insurance officials' radar for at least six months, when the company's assets fell below legal minimums. Then a government-ordered audit identified "irregularities" and a transfer of cash "of a significant nature" that wasn't reported, according to the Washington Business Journal.
What's more, Chartered's owner Jeffrey Thompson has been investigated for allegedly bankrolling more than $650,000 in a shadow campaign to help elect D.C. Mayor Vincent Gray, The Washington Examiner reported.
The city's takeover of Chartered is "in the best interests of the company" and represents a "rebuilding chapter" for the plan, Chartered attorney A. Scott Bolden told the Post. "Operations will continue," he said.
D.C. insurance officials agreed, saying they are working with hospitals and providers to ensure existing contracts and services continue uninterrupted. "Chartered has contracts with all of its providers," said Wayne Turnage, the city's healthcare finance director. "Those contracts will stand. The process for submitting, processing and paying claims have not changed. We have informed providers there is no reason they should not be paid."