LOUISVILLE, Ky. (WDRB) -- Passport Health Plan, the nonprofit organization that administers Medicaid benefits to low-income people in Louisville, says rate cuts that the state implemented last year threaten the organization’s “fiscal solvency and continued existence.”
In a Jan. 9 protest letter sent to Gov. Matt Bevin’s administration, Passport estimates it lost $60 million in 2018 and projects losing another $144 million in 2019 because of the cuts.
“Recent reductions in reimbursement rates that unfairly impact the Greater Louisville region have forced us to operate at a financial loss for months,” Michael Rabkin, Passport’s spokesman, said in a statement. “This is simply unsustainable, putting in jeopardy our ability to serve members, pay providers, and maintain more than 700 local jobs.”
Passport, which was formed in 1997 by healthcare providers like the University of Louisville and Norton Healthcare, took in about $1.9 billion in premiums for its Medicaid members in 2017, according to a regulatory report.
The state pays Passport, a managed care organization, per-member fees to provide benefits for about 310,000 individuals mostly in Jefferson County.
In a statement, the Kentucky Cabinet for Health and Family Services defended the rate structure and said Passport has been unable to show its current payments are not in line with claims data and actuarial projections.
“We have met with Passport on several occasions and have asked for data in support of their claims that our rates are not sound—however, nothing has been provided in that regard,” cabinet spokesman Doug Hogan said in an emailed statement.
Adam Meier, the cabinet’s secretary, will review Passport’s protest. Then, Passport could appeal to another Bevin administration official – the secretary of the Cabinet for Finance and Administration, accoriding to Passport’s letter.
Meier declined to comment on Wednesday because his review is pending.
State Sen. Julie Raque Adams of Louisville, a member of the chamber’s Republican leadership, said Wednesday the situation needs to be resolved, in part because of Passport’s plan to build a headquarters building for its employees and “health and well-being campus” in West Louisville.
“It is critical to the people of Jefferson County that we solve this,” she said.
