Mark Carter of Passport Health Plan

Mark Carter, CEO of Passport Health Plan, Jan. 23, 2019

LOUISVILLE, Ky. (WDRB) – Passport Health Plan, the nonprofit organization that provides Medicaid coverage to more than 300,000 low-income people in Jefferson and surrounding Kentucky counties, could see its reserves dwindle below requirements for its state insurance license by “mid-year,” CEO Mark Carter told lawmakers in Frankfort on Wednesday.

Passport is locked in a dispute with Gov. Matt Bevin’s Medicaid department over rates the state pays the organization to provide benefits for Medicaid patients. For Passport, it's about $2 billion a year.

Carter denied to lawmakers that Passport is “on the verge of bankruptcy,” but he said the cuts could threaten Passport’s insurance license requirements in as soon as a few months.

“If the run rate of losses continues, and of course we’ve made our estimates of what those might look like, that is a real threat down the road,” Carter said. “And by ‘down the road,’ I mean mid-year 2019, that that could be a possibility – that we could be deemed insolvent by the Department of Insurance.”

Passport’s issues were only briefly discussed during a nearly four-hour hearing Wednesday focused on the five “managed care organizations” that administer Medicaid benefits throughout the state.

State Sen. Ralph Alvarado, the co-chairman of the Interim Joint Committee on Health and Welfare and Family Services, said there would be hearing in the coming weeks specifically focused on Passport’s dispute with the Medicaid agency.

“We’re going to get to the bottom as to why those rates have been cut,” Alvarado said.

Alvarado added that he wants more information from Passport, such as the amount its cash reserves, to evaluate just how dire its finances are.

No one from the Medicaid department or the health cabinet testified at Wednesday’s hearing.

But in a letter dated Tuesday, Adam Meier, secretary of the Kentucky Cabinet for Health & Family Services, said any suggestion that the state is trying to put Passport of business is “absurd” and that current payments to Passport are based on sound data and actuarial projections.

Passport earlier this month appealed to Meier to revisit rate cuts that the Medicaid department put into effect July 1, saying it expects to lose $60 million in 2018 and $144 million in 2019 unless payments are raised.

Following the hearing Wednesday, Carter said Passport is “committed to working with the state” to resolve the impasse.

He told lawmakers earlier: “It makes no sense for us to be in a conflict with our primary customer.”

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

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Chris Otts reports for WDRB.com about business and economic topics, higher education and local / state government. He joined WDRB News in 2013 after seven years with The Courier-Journal. Got a tip? Chris is at 502-585-0822 and cotts@wdrb.com.