LOUISVILLE, Ky. (WDRB) – Kentucky Attorney General Andy Beshear’s office has signed off on the proposed sale of a controlling stake in Louisville’s Passport Health Plan, moving the $70 million deal announced in May a step closer to fruition.
Beshear’s office reviewed the deal because Passport, a nonprofit charitable organization, will become part of Evolent Health, a for-profit health plan administration company based in Arlington, Virginia.
"(T)oday’s announcement is an important step in moving this transaction toward closing," Passport said in a prepared statement.
Under state law, the Attorney General’s office is charged with ensuring charitable assets are preserved when a for-profit entity takes over a nonprofit.
In a letter dated Monday, Beshear’s office said it found no issues with the transaction because the $70 million will be distributed to the nonprofit organizations that founded and control Passport, primarily the University of Louisville.
Beshear’s office also cited Evolent Health’s “commitment,” as described in documents Evolent and Passport turned over for review, to completing the planned health and well-being campus in West Louisville and relocating Passport’s headquarters to a new office building there.
And, Passport’s sale will result “in minimal disruption” for the 300,000 low-income people who get Medicaid health coverage through the organization, while Evolent committed to “retain(ing) many of Passport’s current employees,” according to the letter from Beshear’s office.
Passport is the one of the five organizations in Kentucky that administer Medicaid health insurance benefits to low-income people.
It’s the biggest Medicaid insurer in the Louisville area, with about 200,000 people covered in Jefferson and nearby counties.
Evolent has agreed to pay $70 million for a 70% stake in Passport, with the nonprofit’s current sponsors retaining 30%, according to the deal announced May 29.
The sponsors are the University of Louisville and two of its affiliates, Norton Healthcare, the nonprofit that formerly owned Jewish Hospital & St. Mary’s Healthcare and the Louisville-Jefferson County Primary Care Association.
Earlier this year Passport was locked in a heated battle with Gov. Matt Bevin’s administration over Medicaid payment cuts that primarily affected Passport and, according to the organization, would have eventually put it out of business.
Passport got a reprieve when the state raised payment rates in April.
Now the organization is looking to win another five-year Medicaid contract with state, which would begin July 1, 2020.
The deal, which is expected to close in November, still needs approvals from the Kentucky Finance and Administration Cabinet and Department of Insurance, as well as the federal Centers for Medicare & Medicaid Services.