Medicaid deal set to end

FRANKFORT — Passport Health Plan won't have exclusive rights to provide Medicaid coverage in the Louisville region after the end of next year.

The federal Centers for Medicare and Medicaid Services sent a letter to Kentucky officials informing them that the state's contract with Passport will be extended only until Dec. 31, 2012. The letter says the state must adopt a new "delivery model that ensures adequate choice for Medicaid beneficiaries" in the 16-county region, The Courier-Journal reported.

Gov. Steve Beshear said in a statement Tuesday that the state would "begin reviewing its options to provide choice for recipients while maintaining a high standard of care in the most cost-effective manner possible."

Passport chief Mark Carter said the organization is "working with the cabinet to explore alternatives on what Passport's future looks like beyond 2012. ... It remains our desire to improve the quality of health care in our region."

Sen. Julie Denton, the Louisville Republican who chairs the Senate Health and Welfare Committee, said the federal mandate means there will be big changes in the way Medicaid services are delivered in the affected area.

"I am very concerned," said Denton, chairwoman of the Senate Health and Welfare Committee. "We don't know what's going to happen."

No matter what new approach is taken, a statement from the state Cabinet for Health and Family Services said Passport won't be the exclusive managed-care provider to 170,000 people in the region in 2013.

Over the last year, Passport has undergone several changes stemming from a critical audit that found the organization rife with wasteful spending and said millions of dollars had been improperly transferred to health care provider organizations on its board. In response, the organization replaced its executives with a new team overseen by Carter, and providers reimbursed Passport $26.4 million.

Meanwhile, the Beshear administration decided earlier this year to use a managed-care approach statewide to save money in the Medicaid program. The state awarded contracts to three companies to compete as managed-care organizations for 104 counties in Kentucky, but left Passport over the Louisville region.

While federal officials noted that the area should have more choice, Carter maintained that while recipients weren't able to choose their managed care organization, they have a broader choice than other recipients in the state when it comes to selecting doctors, hospitals and other providers.

Federal authorities gave Kentucky officials a June 30 deadline for submitting a new plan for the Passport region.