$26 million settlement will see misused Medicaid money returned - WDRB 41 Louisville News

$26 million settlement will see misused Medicaid money returned

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LOUISVILLE, KY. (WDRB) -- Kentucky's Attorney General sent a collection notice to the leaders of all three downtown Louisville hospitals.  It's a $26 million settlement that will see misused Medicaid money returned.

The money was paid to health providers on Passport Health Plan's board.  It operates as a non-profit with representatives from Norton, Jewish, and University hospitals making up the board.

But an investigation determined that violated state and federal law.  Conway said on Thursday that non-profits such as Passport cannot pay cash dividends to members.

Passport has a $740 million annual contract with the state of Kentucky.  It provides health care for around 165,000 low-income and disabled Medicaid patients.

Conway says payments must begin within ten days, and that the final payments must take place before January 1st, 2016:  "Kentucky taxpayers are now getting a return of their money," Conway said.  "Money budgeted by the state to provide healthcare for fellow Kentuckians most in need." 

Under the settlement, University Physicians Associates must repay $14.3 million through July 31st of 2015.  Norton Hospital will pay $4 million in one lump-sum payment.  Jewish and St. Mary's Inc. will repay $4 million beginning on July 31, 2011.  And University Medical Center will pay $4 million over five years.  

State Senator Tim Shaughnessy uncovered the dealings in 2010: "I'm going to ask Doctor Ramsey for an accounting of the Medicaid funds that were allocated throughout the university.  Where those funds were spent, who authorized that expenditure, and who approved it at the Board of Trustees level?"

U of L released a statement today in response to Senator Shaughnessy's comments, saying, "It's unfortunate that Sen. Shaughnessy has turned his anger on the president and trustees of his hometown university, who had nothing to do with the operation of Passport."

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