Outlook seems bleak for Passport Health Plan, only nonprofit among five companies than manage Medicaid for the state

The state's only nonprofit Medicaid manager, Passport Health Plan, is "facing extinction" unless it gets a favorable court ruling or more help from the state, Passport CEO Mark Carter told Boris Ladwig of Insider Louisville.

Passport sued the state in Franklin Circuit Court over reductions in its Medicaid payments, then delayed a hearing as it made cuts. Those "have reduced its shortfall by about 42 percent, but it is still hemorrhaging about $1.25 million a week," Ladwig reports.

"Passport’s future could be decided in a matter of days, as it soon expects to learn whether the state will change the distribution of Medicaid dollars on April 1," Ladwig writes. "If the state declines to do that, Passport’s fate is all but sealed, barring a favorable — and quick — resolution in court.  And state officials do not appear inclined to make more Medicaid dollars available. Just this week, Kentucky Cabinet for Health and Family Services Secretary Adam Meier wrote Carter a letter to formally reject an appeal Passport had filed earlier this year."

When the cabinet changed its geographic allocation of Medicaid money last summer, sending more to areas outside the Louisville region, that hurt Passport, which is based in Louisville and has most of its 312,000 Medicaid members in the region. The region was cut 4.1 percent and the rest of the state was raised 2.2 percent. There's another big difference; the other four managed-care firms in Kentucky are subsidiaries of for-profit insurance companies.

The threat to its future prompted Passport to stop work on an $87 million headquarters building in western Louisville, which local leaders hope "would stimulate the economy and inhibit further social degradation in an underserved part of the city," Ladwig writes. "Carter said Thursday that Passport already had spent $24 million on the project and has had to liquidate some of its assets to pay back portions of the money it has spent."

Republican Gov. Matt Bevin said March 5 that Passport is "a very poorly run operation," then met with elected officials from Louisville about it. "We had a robust discussion," Democratic state Sen. Gerald Neal told the Courier Journal. "He didn't mince any words." Carter told the newspaper that Bevin's comments shocked him, calling them "outrageous and unsupportable."

Democratic Rep. Attica Scott "said Bevin also mentioned that other companies are willing to take over Passport's state Medicaid business should Passport fail," the CJ reports, quoting her: "It really seems like he has other businesses, other companies, interested. He didn't seem at all like he is interested in saving Passport."

Cabinet Secretary Scott Brinkman listens to Sen. Gerald Neal at press
conference. Behind Neal is rendering of Passport project. (CJ image)

The meeting was held the day after U.S. Rep. John Yarmuth, Louisville Mayor Greg Fischer and other Democrats "urged the Bevin administration to find a solution that would save Passport and its headquarters," the CJ notes. "That event, in a packed meeting hall next to the Passport construction site, took an unexpected turn when two top officials with Bevin's administration showed up."

Meier and Scott Brinkman, secretary of the executive cabinet, "repeated the state's claims that the rates are fair and were developed by an independent actuary hired by the state," the CJ reports. Bevin, called the event "a charade" because "most of the featured speakers have never discussed the issue with him or his staff."