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It seems there will be an impasse for Passport Health Plan and the state Cabinet for Health and Family Services.

Passport Health filed a lawsuit in Franklin County Circuit Court “to protect our business and our almost 700 employees and to ensure our continued service to more than 310,000 Kentuckians,” the managed care organization confirmed in an email late Friday.

The lawsuit, which names Secretary Adam Meier as a defendant, states that attempts to come to an agreement were unsuccessful, according to the Courier Journal, which first reported on the suit.

Insider Louisville reported in early February that Passport Health and state officials were sitting down after a public back-and-forth about a cut in Medicaid reimbursement rates.

Doug Hogan, executive director of public affairs for the cabinet, told Insider Louisville in an email, “we are currently reviewing the lawsuit, but we were certainly surprised to receive it given that we had extensive meetings with their actuaries and they were unable to identify any legitimate issues with the soundness of our rates.”

Meanwhile, Passport Health has argued that the state specifically targeted it and the Louisville region for the reduction, which will have a devastating impact on its ability to serve Medicaid beneficiaries and provider partners.

“This filing, which is part of the dispute resolution process outlined in our contract, is the necessary next step to ensure an adequate reimbursement to allow providers to serve our members, particularly those in the Louisville region,” Ben Adkins, spokesman for Passport Health, said in the email.

“While we would prefer to resolve the matter in negotiation with state leaders, our fiduciary responsibility requires us to explore all options. Without an immediate rate adjustment, Passport Health Plan will face insolvency in 2019. This would be a terrible outcome for Louisville and for Kentucky as a whole.”

Passport Health hasn’t said what, if any, cost-saving measures the organization is implementing to help alleviate some of its financial struggles. Insider reported that Passport was expecting to lose about $4 million per week in January and was paying out $220 million in non-employee management fees to Evolent Health.

Also in jeopardy is Passport Health’s planned $87 million headquarters at 18th Street and West Broadway, a project that has been touted as an economic stimulator in west Louisville.

Caitlin Bowling

Caitlin Bowling

Louisville native Caitlin Bowling has covered the local restaurant and retail scene since 2014. After graduating from the Ohio University’s E.W. Scripps School of Journalism, Caitlin got her start at a newspaper in the mountains of North Carolina where she won multiple state awards for her reporting. Since returning to Louisville, she’s written for Business First and Insider Louisville, winning awards for health and business reporting and becoming a go-to source for business news. In addition to restaurants and retail business, Caitlin covers real estate, economic development and tourism. Email Caitlin at [email protected]ouisville.com.