FRANKFORT — Gov. Andy Beshear is canceling the Medicaid managed care contracts former Gov. Matt Bevin approved shortly before he left office.
“The people of Kentucky should have confidence in the process that ultimately awarded (around) $8 billion in those contracts,” Beshear said during a press conference Monday.
Bevin’s administration awarded Medicaid contracts valued at approximately $8 billion to five health insurance companies in November 2019, not long after the one-term Republican governor lost to Beshear in that month’s gubernatorial election.
Those contracts were slated to take effect July 1.
The Bevin administration decided not to give any of those contracts to Passport Health Plan in Louisville or to Anthem, even though the state has awarded managed care contracts to both of those organizations in the past.
But Beshear said Monday that Passport now will have the opportunity, along with any other interested organizations, to apply during a rebidding process early next year.
“No one is guaranteed a contract,” he said. “Those who provide the best bids, who will provide the best services — who will ultimately help our people get healthy — will be the ones that will be selected.”
A new request for proposals from prospective bidders interested in the state’s managed care contracts is expected to be available in January.
Passport’s CEO, Scott Bowers, praised Beshear’s decision in a statement Monday.
“We appreciate Governor Beshear’s decision to overturn the contract awards. It was the right thing to do,” Bowers said. “We look forward to the new RFP process and are hopeful to continue our 22 years of service to the Commonwealth and the over 300,000 members who depend on Passport for their healthcare benefits.”
Around 1.2 million people are covered by the managed care system in Kentucky, through which the delivery of Medicaid benefits and other services is handled by managed care organizations that have contracts with the state.
The Bevin administration awarded such managed care contracts last month to Aetna Better Health of Kentucky, Humana Health Plan and Wellcare Health Insurance of Kentucky. It also awarded them to a pair of newcomers, United Healthcare and Molina Health Care.
Beshear indicated that those businesses are welcome to submit new bids.
“If you submitted a good bid the last time, submit another good bid,” he said.
Beshear raised several concerns about the way the Bevin administration awarded these pricey Medicaid contracts as he explained why he decided to cancel them.
He noted that Bevin’s administration awarded the contracts when the former governor only had 11 days left in his term. “That has created a perception with the public that they cannot have confidence in the system, and rightfully so,” he said.
Beshear also cited a legislative committee’s unanimous rejection of those contracts as a key concern, and he said past comments Bevin made about Passport created “a perception that there was not a fair and level playing field.”
“When we have $8 billion on the line, I want to make sure that the process is fair,” he said.
Bevin clashed with Passport in the past and publicly called the company “a very poorly run operation.” Passport has contended that rate cuts the state enacted last year, when Bevin was still governor, almost put it out of business.
Once the successful bids are selected through the forthcoming rebidding process and new contracts are authorized, Beshear said his administration will work to ensure any necessary transitions to new managed care providers will be handled smoothly.
“So many that are on Medicaid are already at risk of falling through the cracks,” he said. “We have got to make sure that we do this right.”
In the meantime, he said contracts that are currently in place will remain in effect.
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