As Passport Health Plan’s fate hangs in the balance, it may learn as early as Monday whether the state will change the way it distributes Medicaid dollars beginning April 1.
The state’s top health official told Insider in an emailed statement that the new rate rollout has long been planned and is unrelated to the recent dispute between the state and Passport.
“The April 1 rates are not any type of concession of invalidity in the existing rates, but rather a planned rollout of new rates,” said Adam Meier, secretary of the Kentucky Cabinet for Health and Family Services.
Unless the state significantly increases the dollars it has been providing to Passport, the nonprofit’s fate is all but sealed, barring a favorable — and quick — resolution in court. Passport announced drastic expenditure cuts on March 1, but its CEO Mark Carter told Insider recently that the organization is still losing about $1.25 million per week.
Meanwhile, the state appears disinclined to make any drastic alterations to its distribution rates.
“If substantive issues with the rates are identified, we would consider changes,” Meier said. “To date, Passport has not brought any errors in or substantive concerns with the rate setting process to the table.”
Passport is one of five organizations in Kentucky that manage Medicaid benefits. Medicaid is a mostly federally funded health insurance program primarily for the poor, pregnant women and people with disabilities.
The state last summer changed the way that it distributes the Medicaid dollars. The Louisville region, where Passport has the most of its roughly 312,000 customers, has been receiving less money, while the rest of the state, where Passport’s competitors have more customers, has been receiving more money. Passport, which lost $122 million last year, has sued the state to restore the previous disbursement rates.
Passport officials have said that the current rates were set arbitrarily and unduly harm the Louisville-based nonprofit, but state officials have told Insider that they changed the distribution of Medicaid dollars because of budget cuts and to bring profitability of Kentucky’s managed care organizations in line with the national average.
Local health care experts have told Insider that they worry Passport’s demise could lead to a disruption of care for some Medicaid beneficiaries and delayed payments for some local health care providers as the beneficiaries transition to another managed care organization.
Passport’s fiscal problems had prompted the nonprofit on Feb. 22 to halt work on its $87 million planned headquarters at 18th Street and West Broadway. The move dismayed community leaders, who had said that they hoped the project would stimulate the economy and inhibit further social degradation in an underserved part of the city.