FRANKFORT — Passport Health Plan has terminated the contracts of two top officers, a Passport executive said Tuesday.
Gov. Steve Beshear called last week for the ouster of the two executives — executive vice president Shannon Turner and associate vice president Nici Gaines — after the state auditor found widespread conflicts of interest and lavish spending at the non-profit that manages health services for the poor in Jefferson and 15 surrounding counties.
The Passport board of directors must approve the firings of Turner and Gaines at its meeting Wednesday. But Mark Carter, Passport's interim chief executive officer, said after a meeting Tuesday with Cabinet for Health and Family Services Secretary Janie Miller that Turner and Gaines were told Tuesday their services will be terminated.
When asked whether Turner and Gaines were fired because of the findings of the audit, Carter declined to comment.
"I would rather not go into that because it is a personnel issue," he said.
In a November audit, state Auditor Crit Luallen found that the organization spent too much on travel, gifts, lobbying and on the salaries of its top executives. Turner and Gaines were largely responsible for more than $230,000 in travel, meals and other expenses over a three-year period, the audit found.
At Tuesday's meeting, Miller outlined an 11-point corrective action plan that the cabinet is asking Passport's board to address. Some of the things Miller and Beshear want include the hiring of an internal auditor and a compliance officer, and the cooperation of Passport in a full audit of the organization.
Miller told Passport officials they have until Monday to respond in writing to the cabinet's demands. Beshear has said that if the cabinet's concerns were not addressed adequately, Passport's contract with the state — worth nearly $800 million — would be terminated June 30, when its current contract expires.
Passport, which manages Medicaid services in a 16-county area, is the state's largest contractor. It has only two executive officials and two support staff members. The bulk of its work is subcontracted to a third-party vendor.
Beshear applauded Passport's decision to sever ties with Turner and Gaines.
"I have insisted on an entirely new administrative team at Passport to assure the taxpayers of this state that Passport is operating at a higher level of accountability," Beshear said. "While today's actions are a step in the right direction, there is still more work to be done."
Carter said the board will address all of the cabinet's concerns at Wednesday's meeting, which will not be open to the public.
The board hired Carter, an accountant with health care experience, as its interim executive last week. Passport also has canceled its lobbying contracts effective Jan. 1.