A photo of an oral surgery
Oral surgery. | Courtesy of the U.S. Navy

Two Louisville dental surgeons told Insider that Passport Health Plan will cut reimbursement rates by up to 35%, which will put the state’s dental and medical systems under further strain.

The dental professionals also told Insider that the cuts ultimately will cost the state — and taxpayers — more money. They said lower reimbursement rates will prompt more dentists to stop accepting Medicaid patients, and that means more of them will seek help in already crowded emergency rooms when delayed care leads to complications, excruciating tooth aches and higher costs.

Passport’s dental contractor, Avesis, recently notified Kentucky dentists that it was making “a material change” in their agreement and that the providers could accept, reject or object. If the parties cannot reach an agreement, Avesis said it would “unwind our relationship.”

A portrait of Dr. Richard Pape
Dr. Richard A. Pape

Dr. Richard A. Pape, an oral and maxillofacial surgeon in Louisville, told Insider that Avesis said it would reduce by up to 35% the amount of money dentists will receive for the service they’re providing for Passport’s Medicaid patients. 

That’s a “pretty steep cut from what’s already a pretty low rate,” he said.

Pape, who provides services including wisdom teeth removal and reconstructive surgery on broken jaws, said most medical professionals barely break even on the low Medicaid reimbursement rates, which is why some doctors don’t even accept Medicaid patients.

Pape said about 30% of the patients at his practice, Greater Louisville Oral and Maxillofacial Surgery Associates, are on Medicaid and with Passport. Those patients barely generate a profit, he said, but he can compensate for that with higher reimbursement rates he gets from patients with private insurance.

But it’s a balancing act, and if the money he gets for Medicaid patients declines, Pape said he has to see fewer of them to keep his business viable.

Pape said, for example, that Avesis/Passport have told him that they will reduce his rate for anesthetizing a patient for a wisdom tooth extraction to $67. He charges patients with private insurance about $400, and he said it costs thousands at a hospital.

“You can’t provide that service for $67,” Pape said.

Pape said he has notified Avesis that unless it retains its current fee schedule, he won’t accept any adult Medicaid patients in September.

A portrait of Dr. L. Anthony Sivori
Dr. L. Anthony Sivori

Pape’s business partner, Dr. L. Anthony Sivori, told Insider that the cuts and dentists’ decision to see fewer Medicaid patients also will strain already crowded emergency rooms,

When people are in pain, they can’t wait two or three weeks to see a dentist, Sivori said, which means people will seek help elsewhere, including emergency rooms. That’s a problem, he said, because it bogs down ERs, and because doctors in hospitals may be able to treat only the symptoms but not the cause of the pain.

Pape said that it would be much better — and less expensive — if the care were provided by dentists. The higher costs those patients will incur in the ERs also will put more pressure on the already squeezed Medicaid system, which is paid by state and federal dollars, and ultimately by taxpayers.

Avesis, based in Owings Mills, Md., referred questions to its New York City-based parent company, Guardian Life Insurance Co., which could not be reached.

Passport declined to answer questions posed by Insider via email but sent a statement that read, in part, that is has “always worked hard to maintain strong relationships with our providers and offer reimbursement rates that are competitive with the other MCOs in the Commonwealth.”

Passport, a Louisville-based nonprofit,  handles Medicaid benefits for about 305,000 Kentuckians, of whom two-thirds live in the Louisville area, including nearly 128,000 in Jefferson County, according to state data.

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.

In March, Kentucky Cabinet for Health and Family Services Secretary Adam Meier in a letter also told Passport CEO Mark Carter that the nonprofit was paying some providers “rates that are in excess of what is market driven.”

Since then, Passport has made drastic cuts, and the state has increased how much it is distributing in Medicaid dollars, which had Carter “cautiously optimistic” about the nonprofit’s chance to avert insolvency.

Last month, however, Passport said that for-profit health care consultant Evolent Health planned to acquire a 70% stake in the nonprofit for $70 million. A Medicaid expert told Insider that the bailout was a matter of survival for Passport.

A portrait of Rick Whitehouse
Rick Whitehouse

Rick Whitehouse, executive director of the Kentucky Dental Association, said that he understands that Passport is struggling fiscally and that it is lowering reimbursement rates in line with Kentucky’s other managed care organization.

However, he said that lower reimbursement rates will strain the state’s dental system, which already is having a tough time providing services to the Kentuckians who gained insurance through the Medicaid expansion that was part of the Affordable Care Act, informally known as Obamacare.

The Medicaid expansion provided 400,000 additional Kentuckians medical insurance, but it overloaded the system, as the number of dentists for several years has remained fairly level, at about 2,400, Whitehouse said.

Meanwhile, dentists haven’t seen an across-the-board fee increase since 2002, he said, while their costs to do business keep going up. Some dentists have drastically reduced or even eliminated altogether the number of Medicaid patients for whom they provide services.

A lot of them are simply afraid of losing their business, Whitehouse said. 

He said Passport’s cuts have prompted concerned dentists across the state to call the association and its board members.

If the state and federal governments made more money available to the managed care organizations, they could provide more money to health care providers, and that would ease some of the strain, he said. That also would mean fewer people would end up in the ER.

“That would save a lot of expense down the road,” Whitehouse said.

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.