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District Wins Protracted Litigation Over Health Plan's Medicaid Claims, Saving the District OVer $10,000,000

Wednesday, October 9, 2013

District Wins Protracted Litigation Over Health Plan's Medicaid Claims, Saving the District OVer $10,000,000

CONTACT:  
Ted Gest
Public Information Officer
202-727-6283
ted.gest@dc.gov

WASHINGTON, D. C. – The Contract Appeals Board (CAB or the Board) has ruled completely in favor of the District in several appeals in which a contractor sought more than $10,000,000 in damages and interest from the District, Attorney General Irvin B. Nathan announced today.

The claims arose from an agreement under which Advantage Health Plan provided managed care services to the District’s managed care eligible population under Medicaid.  After the District decided that it would not continue contracting with Advantage, the firm filed a series of appeals with the CAB seeking compensation for alleged breaches of the contract by the District.  The appeals had been pending before the Board since 2004.

In one case, Advantage sought $8,800,000 plus interest, claiming that the District Department of Health Care Finance had exercised an option to its contract and had failed to submit the option to the D.C. Council for approval.  In another case, Advantage sought approximately $660,000 plus interest for transition expenses after its contract expired.  The additional interest on the underlying damages claims would have totaled about $3,300,000 if the contractor had prevailed on all of its claims.

In a 20-page opinion, the Board unanimously agreed with the District’s position on both appeals and opined that even if it had jurisdiction to hear the cases, based on the evidence presented, Advantage was entitled to no recovery.  Accordingly, the CAB dismissed all of the contractor’s claims.

Attorney General Nathan praised the work of Assistant Attorney General Carlos Sandoval of the Civil Litigation Division, who served as lead counsel for the District in this victory, and supervisors Deputy Attorney General George Valentine and Section Chief Kimberly M. Johnson.

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