Passport Health Plan is building a new headquarters at 18th Street and Broadway in west Louisville. | Photo by Boris Ladwig

An impasse between Passport Health Plan and the state Cabinet for Health and Family Services could be resolved soon.

The managed care organization has been at loggerheads with the state over a reduction in Medicaid reimbursement rates that Passport has said threatens the existence of the Louisville-based company, which is in the midst of a high-profile building project in west Louisville.

However, the company’s new president and chief operating officer Carl Felix told a legislative committee Wednesday that Passport is in talks with the Cabinet this week in the hopes of working out something privately. Felix was optimistic enough to say an agreement could be reached as early as tomorrow.

“I just wanted to state for the record that we’ve reached out, and we want to take this out of the public arena and have a discussion because the state is our primary partner, and we just feel that this has taken a flavor that’s been personally distasteful to me,” Felix told the Senate’s standing committee on health and welfare right before adjournment.

The remarks followed a presentation that was given by the Cabinet to explain how the rates were set and to dispute that the Cabinet or the state Department for Medicaid Services has been biased against Passport. That’s something that the company has alleged in correspondence that has been reported on by the Courier Journal and other media.

Health & Family Services Secretary Adam Meier brought up the notion of bias during the opening of the state’s presentation, telling legislators that the state has been “very transparent” with the managed care organizations that provide Medicaid services in the state.

“We’ve been very accessible with all the plans,” he said. “That especially includes Passport. We’ve had numerous meetings with Passport” and have never turned down a meeting, at least at the Secretary’s level.

Meier also said that the overall process of setting the rates was very data-driven and that the U.S. Centers for Medicare & Medicaid Services certify that it’s “actuarilly sound.”

Sen. Ralph Alvarado, who chairs the committee, asked Felix to come forward after the state’s presentation, which included Meier and Medicaid Commissioner Carol Steckel and two actuaries from the Wakely Consulting Group who gave a detailed overview.

“We can’t argue with anything that’s been stated here today,” Felix said. “This is a very logical process that had for us a very huge financial impact,” namely “a $65.5 million shortfall in 2018.”

However, he said, Passport met with the state earlier this week and has flown actuaries in to have an additional meeting with the Cabinet. “We’ll live with whatever the final decision is.”

In a recent presentation to another legislative committee, Passport’s chief executive Mark Carter said that the company could wind up in bankruptcy by mid-year if the state doesn’t do something about the reimbursement rates. The company has filed a formal appeal with the state.

But the rates don’t appear to be the company’s only problem.

An Insider Louisville analysis, based on Internal Revenue Service records and U.S. Securities and Exchange Commission filings, showed that Passport’s finances also were being undermined by hundreds of millions of dollars in management fees to Evolent Health.

Darla Carter
Darla Carter is a hometown girl who recently joined the staff of Insider Louisville to mostly cover health. She previously served as a longtime health and fitness writer for The Courier-Journal, where she also worked for the Metro, Neighborhoods and Features departments. Prior to that, the award-winning journalist wrote for newspapers elsewhere in Kentucky and Tennessee, covering a range of topics, from education to courts. She's a graduate of Western Kentucky University, where she studied journalism and philosophy, and is the proud mom of two young children.