Passport Health sign

FRANKFORT, Ky. (WDRB) -- There is no sign yet of a breakthrough, but the two sides in a rate dispute between the state and Louisville-based Passport Health are now seriously talking.

The development unfolded during a meeting Wednesday of the Senate Health and Welfare Committee. Adam Meier, the secretary for Health and Family Services, came before the committee to explain the decision to cut the amount it pays Passport Health for providing Medicaid Services to some 300,000 patients in the Louisville area.

The Cabinet cut Passport’s Medicaid reimbursement rate as part of statewide restructuring last July. The company said, so far, the reduction has blown a $65 million hole in its budget and could put it out of business.

Meier denied Passport’s claim that it was being unfairly targeted.

“The rate setting process, it's a very data driven process,” he told lawmakers.

Meier said the rates are based on a complex formula, driven by federal guidelines and guided by expert consultants who accompanied Meier to the hearing.

Mary Hegemann and Maria Dominiak of the Wakely Consulting Group gave lawmakers a detailed explanation of the rate-setting process.

“We have been very transparent," Meier said. "We've been very fair. We've been very accessible."

Meier said the Cabinet has asked Passport for information that would cause it to rethink the rate cut.

“To date, we have not seen anything that has caused us to question the validity of the rates,” Meier said.

But that could be changing.

A Passport executive at Wednesday's hearing promised to provide the information the Cabinet wants. Passport COO Carl Felix said the company wants to defuse the conflict but would not speculate as to whether the new talks could save the company.

“I can't answer that yet, because I haven't had the meetings,” Felix said. “Hopefully, we'll come to resolution that will provide some long-term stability for the health plan.”

Meier said any decision to restructure Passport’s rates will be strictly by the numbers.

“If there's data out there that's not being considered that would affect the rates, we would take that into account,” Meier said.

As the dispute moves into a new phase, construction of Passport's new headquarters in west Louisville continues for now. The Passport campus is considered to be a key part of the economic development plan for the area.

Sen. Julie Raque Adams of Louisville said she is encouraged that Passport and the Cabinet are actively trying to resolve the dispute.

“Passport, I know, has been an excellent corporate citizen in Louisville," Adams said. "And so I think they're ready to dig in and see what they need to do."

Passport has said if the dispute is not resolved, it could face insolvency by the middle of this year.

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I cover a range of stories for WDRB, but really enjoy tracking what's going on at our State Capitol. I grew up on military bases all over the world, but am a Kentuckian at heart. I'm an EKU alum, and have lived in Louisville for 30 years.