FRANKFORT, Ky- Passport Health Plan was in the hot seat on Monday, despite not attending a committee hearing.
The Medicaid Managed Care Organization was scheduled to appear before the Medicaid Oversight and Advisory committee Monday. The group said it would not be testifying in front of the committee due to advice from their legal counsel.
The MCO is currently in the process of two different requests for proposals (RFP). One is the acquisition by Evolent Health. Attorney General Andy Beshear approved the deal in late July, but it still has several other regulations to be approved before the purchase in made final.
Passport said it recently submitted their RFP to the state to approve their contract. This is part of a bid process all MCO’s must go through every five years.
Passport says they submitted their RFP in July but don’t expect it to be approved until October or November. The time in between is known as a “blackout period” where the parties involved should only communicate through a designated contact.
“I have consulted with Passport’s legal and compliance executives and we have determined that in order to avoid any actual or perceived non-compliance with the RFP terms, I will be unable to attend the September 9, 2019 hearing,” a letter from CEO Scott Bowers to lawmakers read.
Some lawmakers disapproved of the decision.
“We’re in this blackout period now and I think that’s code for let’s keep the legislature in the dark as we possibly can,” said Sen. Stephen Meredith, R-Leitchfield. “I don’t know where Passport stands now in terms of financial stability and I think we all represent providers who are aggrieved by this, quite concerned they are dealing with a Medicaid Care Organization that can’t pay its bills.”
“I think there are a lot of questions that we could have asked that did not pertain to contract and would not have violated the blackout period,” said Sen. Jimmy Higdon, R-Lebanon. “So I think it was a little shortsighted on their part choosing not to be here.”
Passport has had a turbulent relationship with the Republican-led legislature. It said changes to the Medicaid reimbursement rates were causing the company to go bankrupt.
The legislature acknowledged the MCO was being negatively impacted by the change in the reimbursement rates, but cited high administrative costs and other factors as ways they could look to cut costs.
Passport says their finances are improving and that the company was able to operate on a positive margin beginning in July 2019, the first time in about a year. The MCO says the improvements are from initiatives enacted throughout the past year. The letter lists these three improvments:
- Expanding our efforts to better manage the health of our members through an extensive and holistic population health approach and infrastructure.
- Tightening our operating costs that were already low relative to industry benchmarks.
- Expanding our efforts to collaborate with and support providers in their transition to value-based care.
The letter also says the organization has cut their administrative costs by double-digits compared to a year ago.
Despite this, lawmakers say people in their district are still having problems with Passport.
“I have been dealing with a provider in my area who’s had some recent struggles with Passport, across the board reductions in reimbursements to the point where this physician who is one of the main Medicaid MCO providers in my area is dropping Passport,” said Sen. Danny Carroll, R-Paducah. “This came without notice and I do understand there has been some additional communications and they are trying to negotiate a reimbursement rate that is not dropped quite as far as what was traditionally proposed.”
Passport says they will go before the committee once the blackout period has lifted but did not want to jeopardize the RFP.
“Therefore, we felt it was inappropriate to provide public testimony on these matters and did not feel comfortable testifying at the Committee hearing at this time,” a statement from Passport said. ”We have indicated to the Committee that we are willing to speak at a future hearing once the communication blackout period is lifted.”
Some Republican lawmakers have been floating around the idea of lowering the number of MCO’s in the state. Sen. Meredith has prefiled legislation the year that would take the number of MCO’s from five to three.
“It’s getting very frustrating with the lack of cooperation and lack of ethical practices that some of our MCO’s are going through at this point, and it’s not serving the needs of our people of our state as far as their healthcare or our providers,” Carroll said. “It’s disappointing and it’s disappointing that the gentleman chose not to be here.”
The bill can be found here.