Chartered Health Plan’s finances draw scrutiny

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“This is too serious to get sidetracked,” Mr. Barry said.

After the hearing, Mr. Catania said the company’s lack of capitalization was the main driver of the situation Chartered finds itself in, and not city officials’ personal views of Mr. Thompson.

Council members exhibited concern over financial irregularities at the company, which are still being examined. An auditing company has until Oct. 30 to finish its work.

“I wish I could be more specific, but I can’t until the auditor ties up all the loose ends and we have a completely accurate version of the company’s books, and how those books got into the shape they are in now,” Mr. White said, noting the scrutiny will have no effect on the continuity and quality of care for Chartered’s members.

Mr. Turnage said the recent discovery of $3 million in unsourced revenue, which company executives disclosed to city officials this month, can be viewed in two ways at this point. In the “benign” version, the money may not have been adequately documented. A “malignant” reading of the situation would indicate the revenue is fictitious and that someone was trying to inflate the books, he said.

If the latter scenario were the case, then the company’s capital would enter subzero territory, Mr. Catania noted.

“Then there really is no money — it’s upside-down,” he said.

A pair of employees were dismissed from the company after the problems came to light, officials said.

Mr. Catania also stressed the impact of the situation on Chartered’s 160 employees. He asked Mr. Turnage to encourage any purchaser of the company to hire some of the firm’s existing staff.

“Through no fault of their own,” Mr. Catania said, “they find themselves out of work.”

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