Employees of Passport Health Plan’s would-by buyer Evolent Health have asserted in class-action lawsuits that the health care consulting company has violated state and federal wage laws.

The employees assert that the company has failed to pay them overtime for periods in which they worked more than 40 hours a week, violating the Federal Labor Standards Act and Illinois state law. The suits were filed in U.S. District Court in Illinois.

Evolent Health, based in Arlington, Va., could not be reached but in filings with the courts said that it denies the allegations.

Sakinah Kelly, who worked for Evolent from summer 2016 to summer 2018, claims in the suit that she and other employees “regularly worked over 40 hours per week” and were paid a salary and no overtime, in violation of the FLSA and the Illinois Minimum Wage Law.

The suit states that the lawsuit could cover “all individuals employed by (Evolent) as Care Management Employees in the last three years who were paid salary and no overtime.”

In a separate class-action suit, Martin Torres, who has worked for Evolent in an Illinois call center since December 2017, asserts that the company routinely requires him and others to work without pay before and after their scheduled shifts.

Evolent has operated call centers in Illinois, Florida, Texas and Kentucky, according to the suit, which says the allegations are filed on behalf of Torres “and all other current and former hourly employees of (Evolent whom the company) required to perform the work described herein without pay.”

According to the suit, Torres contends that to do their work, he and others have to boot up their computers and open software programs, which the company requires them to do before the start of their shift. In addition, Torres alleges, after their shift, he and others have to “finish the computer work and reporting about their last call and/or close down their various software programs and computer.”

The suit says that Evolent “knowingly required and/or permitted (Torres) and other similarly situated telephone-dedicated employees to perform unpaid work before and after their scheduled shift times.”

“This unpaid work includes but is not limited to booting up computers, initializing several software programs, reading company issued emails and instructions at the beginning of their shifts, and completing customer service calls, securing their workstations, locking their desk drawers, and securing any customer or proprietary information at the end of their shifts,” the suit reads.

Attorneys for Kelly and Torres could not be reached.

Evolent said in its response to the Kelly suit that it did, indeed, not pay her for overtime because she was a salaried, exempt employee.

Evolent plans to buy Passport, a Louisville-based managed care organization that handles Medicaid benefits for about 305,000 Kentuckians, of whom two-thirds live in the Louisville area. Kentucky Attorney General Andy Beshear recently said his office reviewed the proposed $70 million acquisition and does not oppose it.

Passport has lost $164 million in the last three years, including $123 million last year, blaming recent struggles on the state lowering its disbursement of Medicaid dollars. The state said that it had made changes to the Medicaid program because of budget constraints and because Kentucky’s managed care organizations were generating much higher profit than their peers in other states.

The nonprofit’s survival is critical to the company. Passport has paid Evolent hundreds of millions in management fees in the last few years. The payments this year will account for about 12% of the company’s revenue.

A Medicaid expert had told Insider that the $70 million bailout was a matter of survival for Passport. Without Evolent’s cash and promised “interim balance sheet support,” Passport likely would have lacked the capital required to apply for the new five-year Kentucky Medicaid contract. That contract is essentially Passport’s sole revenue stream.

A decision on whether Passport gets one of the five new Medicaid contracts is expected in the fall. Passport has told Insider that it has applied for the contract. The state said it could not yet disclose how many other managed care organizations have applied.

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Boris Ladwig
Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.