Passport ‘evaluating’ state’s new Medicaid disbursement rate proposal

Passport Health Plan leaders met with state officials Tuesday to get a draft of new Medicaid disbursement rates that are to take effect April 1 and could determine whether the embattled nonprofit can survive long-term.

Passport told Insider via email that it has received the information and in the coming days “will be evaluating the impact of the rates on Passport’s financial outlook.”

The Louisville-based organization has been battling the state over how the Medicaid dollars are distributed.

Mark Carter

Unless the state significantly increases the dollars it has been providing to Passport, the nonprofit’s fate is all but sealed, barring a favorable — and quick — resolution in court. Passport announced drastic expenditure cuts on March 1, but CEO Mark Carter told Insider recently that the organization is still losing about $1.25 million per week. It lost $122 million last year.

Passport is one of five organizations in Kentucky that manage Medicaid benefits. It has 312,000 customers, about two-thirds of whom live in the Louisville area. Medicaid is a mostly federally funded health insurance program primarily for the poor, pregnant women and people with disabilities.

Passport officials, who have sued the state to restore previous disbursement rates, have said that the state last summer changed its rates arbitrarily and that they unduly harm Passport. However, state officials have told Insider that they changed the distribution rates because of budget cuts and to bring profitability of Kentucky’s managed care organizations in line with the national average.

State leaders appear disinclined to make any drastic alterations to its distribution rates.

Adam Meier

Adam Meier, secretary of the Kentucky Cabinet for Health and Family Services, has told Insider that the state would consider changes if “substantive issues with the rates are identified. To date, Passport has not brought any errors in or substantive concerns with the rate-setting process to the table.”

The state told Insider via email Tuesday that actuaries from the Kentucky Department for Medicaid Services and from the five managed care organizations were gathering that day to discuss the proposed rates that are to take effect on April 1 and last through June 2020. The new rate rollout has long been planned and is unrelated to the recent dispute between the state and Passport, the state has said.

The state said that the rate-setting process started late last year and that managed care organizations “will have the opportunity to review and submit questions/comments pertaining to the rates before they are finalized.”

The department typically sets rates for a 12-month period, but this year had to adjust the timing because of the “unusual circumstances” related to the state’s plan to change its Medicaid program. That plan, called Kentucky HEALTH, is pending approval from the Centers for Medicare & Medicaid Services but also is being scrutinized in a court case.

Local health care experts have told Insider that they worry Passport’s demise could lead to a disruption of care for some Medicaid beneficiaries and delayed payments for some local health care providers as the beneficiaries transition to another managed care organization.

Passport’s fiscal problems had prompted the nonprofit on Feb. 22 to halt work on its $87 million planned headquarters at 18th Street and West Broadway.