LOUISVILLE, Ky. (WDRB) -- Passport Health Plan, the nonprofit that provides Medicaid coverage in Louisville, said Friday it's resorted to "a series of severe cost-cutting measures" to avert the immediate threat of being declared insolvent by state insurance regulators.
As a result of the cuts, Passport is no longer asking a judge to immediately reverse Medicaid rate cuts that have threatened the organization's survival.
"While these steps have the potential to negatively impact our community and the care we coordinate for our members, we have a responsibility to do everything we can to keep Passport in business," CEO Mark Carter said in a press release.
The development doesn't change the basic dispute between Passport -- which serves more than 200,000 low-income Medicaid members in greater Louisville -- and Gov. Matt Bevin's health cabinet.
It simply means that Passport is no longer asking a judge to immediately reverse the rate cuts.
Passport has said cuts implemented in mid-2018 have it on track to lose $144 million this year.
The nonprofit takes in nearly $2 billion a year, almost all of it Medicaid money flowing from the federal and state governments. It uses the vast majority of that revenue to pay doctors, hospitals and other providers who treat Passport members.
The cuts were targeted at Louisville region that Passport serves, the organization has said, while rates were increased for the four other managed care organizations -- all for-profit health insurers -- that handle Medicaid in the rest of Kentucky.
Bevin's health cabinet has said the rate changes were based on "sound" actuarial data, which Passport disputes. State officials have denied Passport's assertion that they're trying to put the organization out of business.
Passport did not explain the cuts in detail, nor say how much money they have saved.
Passport said the cuts include:
- Reduced payments to providers and "business partners for health care and other contracted services"
- A restructured arrangement with Evolent Health, the for-profit Virginia company that directly employs hundreds of people who work for Passport through a partnership announced in 2016
- Administrative cuts, such as not filling vacant jobs
Adam Meier, Bevin's health secretary, said in a statement Friday that Passport's backing down from its request for immediate relief by the judge "appears to be an admission that its financial plight never was as bleak as it claimed in the lawsuit filed against the Cabinet."