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Karl A. Racine
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District Responds to Comments Regarding 2011 Civil Settlement With Chartered

Tuesday, March 18, 2014

Ted Gest, Public Information Officer
[email protected]

WASHINGTON, D.C. – D.C.  Attorney General Irvin B. Nathan and Wayne Turnage, director of the D.C. Department of Health Care Finance, responded to a Washington Post editorial on the 2011 settlement of a claim against the District by D.C. Chartered Health Plan, a company controlled by Jeffrey E. Thompson. A version of the letter was published by the newspaper on March 16. The full text as submitted to the Post is below:

Your March 12 editorial regarding the 2011 settlement of a claim against the District of Columbia in the Contract Appeals Board by Chartered, a company controlled by Jeffrey Thompson, irresponsibly suggests that the settlement resulted from campaign contributions and was on grounds other than what was in the public interest.  That is not the case. The settlement was fully in the public interest, saved the District’s taxpayers millions of dollars, and was negotiated at arm’s length by career lawyers at the District’s Office of the Attorney General, and fully vetted by professionals at the Department of Health Care Finance, by Mercer, a prominent, publicly held independent actuarial consulting firm, as well as by the U.S. Government, which not only approved the settlement but also agreed to pay for 70% of it.

All of that occurred before the settlement was ever recommended by the Attorney General to the Mayor and ultimately approved, as required by District of Columbia law.  At no time did the Mayor or anyone in the Executive Office of the Mayor urge a settlement of this matter.

Chartered’s claims were for approximately $20 million combined.  Mercer concluded that Chartered was likely correct that the rates used to compensate Chartered were problematic.   If Chartered’s claims had gone to trial, the District would likely have faced judgments in the range of $20 million.

Instead, with the $7.5 million conditioned on the federal government approving and agreeing to pay 70% of the settlement, the District’s contribution of $2.25 million saved the District many millions in potential losses and avoided creating unnecessary and costly problems with federal regulators that the District faced if it had gone to trial and lost.  Every District Government professional in our offices engaged on this matter concluded before the settlement -- and remains entirely convinced today -- that this settlement was in the best interest of the District and its taxpayers.
Irvin B. Nathan
Attorney General, District of Columbia

Wayne Turnage
Director, D.C. Department of Health Care Finance