In a tense press conference, Rep. John Yarmuth and state Sen. Gerald Neal call on Bevin adminstration officials to save Passport headquarters. 3/4/19
Matt Stone, Louisville Courier Journal
A Republican lawmaker from Louisville said Saturday he will ask Democratic Gov.-elect Andy Beshear to review the $8 billion in Medicaid contracts awarded to private health insurance companies in the final days of Republican Gov. Matt Bevin’s administration.
Rep. Jason Nemes said in a Facebook post he’s particularly concerned by the Bevin administration excluding two companies that currently hold contracts — Anthem and Passport Health Plan of Louisville.
The contracts involve managed health care for more than one million Kentuckians covered by Medicaid.
”While I have great respect for the current administration … it concerns me that 8 billion dollars in contracts were awarded in the last days of the current administration,” Nemes wrote.
“Of more concern to me is that two incumbents with a proven track record in Kentucky were ousted. Passport, in particular, has been serving the Commonwealth for 22 years. Passport supports many community agencies that help people in need and many of these individuals improve their health outcomes and quality of life because of that.”
J. Michael Brown, a top Beshear aide, has already expressed concern about the contract awards announced Nov. 27 and said the administration will review them after Beshear takes office on Tuesday.
“Awarding $8 billion in contracts with just 11 days left in this administration is concerning,” said Brown, Beshear’s transition chairman who will serve as executive cabinet secretary in the new administration. “As we move through the transition and ultimately the change of the administration, we will be taking a close look at this action.”
“We share Rep. Jason Nemes’s concerns that $8 billion in contracts were awarded in the final days of the current administration,” Beshear said in a statement. “We pledge to conduct a careful and through review.”
Both Passport, which serves about 300,000 Medicaid enrollees — most in the Louisville region — and Anthem, which serves about 130,000 people, have said they plan to file formal protests over the contract awards.
Companies that won contracts are: Aetna Better Health of Kentucky, Humana Health Plan and Wellcare Health Insurance of Kentucky, all of which hold existing contracts with the state, and two newcomers, United Healthcare and Molina Health Care.
The five-year contracts take effect July 1.
Kentucky’s $11-billion-a-year Medicaid program, which gets about 80% of its money from the federal government, provides health coverage for about 1.3 million low-income and disabled individuals. About 1.2 million of them fall into the managed care system.
Also read: Bevin administration paid $600K for probe, but what it produced is unknown
While several Democrats in the legislature and on Louisville’s Metro Council have criticized the decision to drop Passport, Nemes appears to be the first Republican to express concern.
Nemes said in an email Saturday that he decided to post his statement on Facebook after a number of questions about the contract award from constituents in his Eastern Jefferson County district.
He said in his Facebook post he had not reviewed the bids and therefore has no position on whether they were awarded to the best bidder.
“But due to the significant impact this change of course will have on the people I represent, I will ask the new administration to review of the procurement process, which could lead to the affirmation or reversal of this decision,” he said. “We owe it to the taxpayers and Medicaid members in Louisville and around the Commonwealth to be sure that such a huge change is right. Also, while not dispositive, I think another significant consideration is the 600 jobs that the current contractor employs to work in our community and serve our families.”
More: Less than a week before inauguration, Beshear addresses challenges he’ll face as governor
Non-profit Passport began in 1997 as the state’s first Medicaid managed care company. Local health officials organized it as a pilot project in the Jefferson County region to help the state control growing Medicaid costs.
The state eventually expanded Medicaid managed care statewide, adding contracts with other health insurance companies
Passport’s loss of the contract renews questions about the future of a new headquarters and health campus it had planned to build in western Louisville. Local leaders had hailed the project as a boon to growth and economic development.
Passport suspended construction of the 337,000-square-foot complex at 18th and Broadway in February, prompting an outcry from community leaders who had welcomed the development. At the time, Passport said financial problems from state rate cuts in 2018 forced it to suspend work on the project.
Passport’s loss of the Medicaid contract also is a blow to Evolent Health, a Virginia-based health management company that announced plans to buy Passport in May for $70 million, a transaction expected to close by the end of this year.
Should the deal fall through, the University of Louisville, as a founding partner of Passport, could lose about $45 million from the sale. U of L plans to put the money toward its medical school and University of Louisville Physicians, a practice that includes more than 700 primary care and specialty doctors who also work as professors and researchers at the university’s medical school.
Reach Deborah Yetter at dyetter@courier-journal.com or 502-582-4228. Find her on Twitter at @d_yetter. Support strong local journalism by subscribing today: www.courier-journal.com/subscribe.
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