Passport CEO On Reimbursement Cuts: 'It Feels Political To Me Right Now'
Passport Health Plan is in survival mode. The nonprofit Medicaid provider could have just months of independent operation left, which it blames on regional reimbursement cuts implemented by the state last summer.
CEO Mark Carter said the company is pursuing a contractual appeal with the state, and is about to escalate to the level of appealing to the secretary of the Finance and Administration Cabinet, William Landrum. If Landrum's decision doesn't go Passport's way, the next step would be appealing to Franklin Circuit Court.
"We think that Sec. Landrum has a reputation for being independent and objective and so we're hopeful that in that venue we'll receive a fair hearing," Carter said in a recent sit-down interview with WFPL.
He described himself as a political independent, and avoided answering whether he is a supporter of Republican Gov. Matt Bevin. But earlier this week, a group of Democrats held a news conference — that was crashed by state Republicans — alleging that Passport was treated unfairly, and the governor subsequently dismissed the event as political theater.
That raises the question: Does Carter think there were politics involved in the decision to cut rates?
Why does Carter think the decision could have been political? After all, if the Department of Insurance had to takeover Passport, that would require a large administrative lift at high expense, whereas Medicaid managed care organizations save the state money.
Passport has already announced it would cuts rates to providers, pause construction on a new $130 million headquarters in west Louisville and implement other cost-saving measures. Carter said he has considered staff reductions, but that there is no specific plan for that at the moment.
Critics have accused Passport of not managing the business well, including by paying too much in administrative fees — a charge Carter denied.
He said that it might be difficult for the state to admit it made a mistake, but is it possible that Passport is the one that's wrong?
So far, Passport's conversations with the state haven't achieved the results it wants. That's why the company is currently suing for an injunction against the cuts.
Carter said he remains open to sitting down with the state to find a compromise. So what happens if that happens, but new rates don't go high enough?
This interview has been edited for length and clarity.