Passport Health sign

LOUISVILLE, Ky. (WDRB) – In its waning days, Gov. Matt Bevin’s administration has awarded the state’s Medicaid managed care business to five national health insurance companies, cutting out Louisville’s Passport Health Plan.

If the decision holds up, about 200,000 low-income people in the Louisville region who receive health coverage through Passport – and another 100,000 scattered throughout the state – would be transferred to a new managed care provider starting July 1, 2020.

Passport CEO Scott Bowers said the company plans to challenge the decision announced Wednesday morning by the Kentucky Cabinet for Health and Family Services. 

"We are deeply disappointed in this decision, having been a committed partner to the state and an organization that has been dedicated to improving Kentuckians’ health and wellbeing for more than 20 years, with demonstrable results,” Bowers said in a statement. 

J. Michael Brown, the transition team chair for Democratic Kentucky Gov.-elect Andy Beshear, said in a statement that the decision will be scrutinized by the incoming administration. Beshear, a Democrat who defeated incumbent Republican Bevin earlier this month, is set to take office Dec. 10. 

“Awarding $8 billion in contracts with just 11 days left in this administration is concerning," said Brown, whom Beshear tapped as his executive cabinet secretary. "As we move through the transition and ultimately the change of the administration, we will be taking a close look at this action.”

The five contracts were awarded to Aetna Better Health of Kentucky; Humana Health Plan, Inc.; Molina Healthcare of Kentucky; UnitedHealthcare Community Plan of Kentucky; and WellCare Health Insurance of Kentucky.

The move raises questions about the future of Passport, which was formed in the late 1990s by local health providers, and its stalled headquarters building and health and well-being campus planned for west Louisville.

Passport still is seeking to identify a developer for that site, but spokesman Ben Adkins said "our immediate efforts are focused on mounting a successful protest to the state contract awards so that we can continue to serve our members across the Commonwealth.”

Evolent Health, a for-profit health administration company based near Washington, D.C., struck a deal to buy a 70% stake in Passport earlier this year for $70 million. The transaction is expected to close by the end of the year.

Evolent’s CEO, Frank Williams, told investors in May that the company would likely liquidate Passport, selling it for parts, if Passport failed to win the next round of Medicaid business from Kentucky.

“It’s hard to predict but just given the value in the plan, we believe in that scenario, we would recoup a substantial amount of our investment just based on that ‘wind down’ value,” Williams said at the time.

Evolent supports Passport's plan to protest the Bevin administration's decision and intends to complete its acquisition of the Louisville-based provider by the end of next month, spokeswoman Kim Conquest said in a statement. 

Evolent stock was trading at $7.06 a share on the New York Stock Exchange just before 11 a.m., down nearly 34 percent from its opening price.

At issue in Kentucky are the five-year contracts for companies that handle Medicaid benefits for the state's 1.3 million enrollees – paying claims and receiving funding from the state. The next round of contracts runs from mid-2020 to mid-2025.

The Bevin administration solicited bids for the contracts over the summer, but the announcement of the successful bidders has been delayed over the past few months.

Gov.-elect Andy Beshear is set to take office on Dec. 10.

As it now stands, WellCare would assume the contract to serve all children in the state’s foster care system and those also included in the Department of Juvenile Justice system – in all, about 24,000 children.

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Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2019 WDRB Media. All rights reserved.