FRANKFORT — The Kentucky Department of Insurance wants the Passport Health Plan to require more of its staff to report conflicts of interest, and the department wants more reporting on how some Passport grant money is spent.
Those recommendations came out of an insurance audit of Passport Health Plan, the subject of a scathing state audit in November that questioned the organization's management. Passport Health Plan is the only Medicaid managed-care plan in Kentucky, serving more than 160,000 poor people in 16 counties, including Jefferson and surrounding counties.
An order issued by the Department of Insurance and obtained by the Herald-Leader through an open-records request asks that Passport report and track grants it gives to organizations as reimbursements for providing health care to the poor. The lack of monitoring was a key finding in State Auditor Crit Luallen's audit in November.
The organization gave $20 million in 2008 and 2009 to health care organizations that were founding members of the Passport Health Plan. State auditors found that there was little or no documentation that the money had been used to treat the poor.
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The Department of Insurance order, signed April 20, also asks that Passport obtain signed, annual conflict-of-interest forms from all Passport staff; managers of AmeriHealth Mercy, its third-party administrator; and Passport board members. State auditors found that top Passport executives had contracts with AmeriHealth Mercy, which runs the day-to-day operations of Passport. Those conflicts of interest, as well as questionable spending on lobbyists, travel and food, eventually led to the ouster of Passport's board president and two top executives.
Passport did not dispute the Department of Insurance's findings, according to the order. In a statement released Thursday, Passport said it was planning to comply with all of the issues raised in the Department of Insurance audit. Since November, Passport has hired a new interim chief executive and a corporate compliance officer.
The Department of Insurance, which monitors all insurance companies in the state, announced in January that it was going to do its own audit of Passport.