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A former competitor to alleged mayoral “shadow campaign” financier Jeff Thompson‘s Medicaid managed care organization says Thompson’s Chartered Health Plan received improper special treatment from city officials in 2004.

Advantage Healthplan, the competitor, is currently in a long-running legal dispute with the District before the Contract Appeals Board, where it’s seeking damages that could add to the total amount the city is paying to extricate itself from its relationship with Thompson.

According to Advantage, the city improperly helped Thompson’s Chartered in two ways. First, it gave Chartered a larger-than-required share of new Medicaid enrollees who did not specify an MCO they wanted to join. Advantage says the undecideds should have been equally distributed among four MCOs who had contracts with the city at the time.

Second: Advantage alleges the city abruptly canceled its contract with Advantage for no proper reason. Advantage suggests this move was motivated by then-city administrator Robert Bobb‘s desire to give Chartered a bigger share of the city’s Medicaid market. In CAB records, Advantage says there were “substantial political and financial ties between” Thompson and Bobb. Those ties include campaign donations from Thompson’s network of donors (including Jeanne Clarke Harris, the Thompson associate who pleaded guilty last summer to running a large straw donor scheme) when Bobb ran for school board president in 2006, and contracts Bobb awarded Thompson’s former accounting firm while Bobb ran Detroit’s school system.

The president of Advantage says he first found out his company’s contract wasn’t going to be extended not from city officials, but from Thompson, who called and offered to buy Advantage’s share of Medicaid clients.

The city says Advantage’s claims are meritless and tried last year to block Bobb from being deposed.

Says Bobb: “Those guys are bald-faced liars. … I don’t even remember them.”

Advantage lawyers did not return calls seeking comment.

The dispute with Advantage is taking place while the city tries to sell Chartered, which it took control of last year, to Philadelphia-based AmeriHealth Mercy. That transaction has the potential to be costly to the city’s taxpayers, as Chartered has more than $40 million in liabilities that AmeriHealth isn’t going to assume.

Photo courtesy of Charles Parsons