Passport to lose exclusive contract for Louisville-area Medicaid at end of 2012; more choice needed, federal agency says

The exclusive contract the state has with Passport Health Plan, which provides Medicaid coverage for 170,000 people in Jefferson and 16 neighboring counties, has been extended until the end of next year. But after that, the state must adopt a different "delivery model that ensures adequate choice for Medicaid beneficiaries" in that area, a letter from the federal Centers for Medicare and Medicaid Services reads.

Since 1997, Passport has exclusively provided coverage for that population, reports Tom Loftus of The Courier-Journal. Gov. Steve Beshear said Tuesday the state will start looking at alternatives for how to provide choice for the area. In the rest of Kentucky, Medicaid recipients can choose from three managed care organizations.

Sen. Julie Denton, R-Louisville, said she is "very concerned" about the major changes that will be involved. "We don't know what's going to happen," she said.

A year ago, Passport received a scathing report from state auditor Crit Luallen, who found wasteful spending "and said it had improperly transferred millions of its reserves to the health care provider organizations represented on its board," Loftus reports. After an investigation by Attorney General Jack Conway, those providers paid $26.4 million to pay for the transfers. (Read more)