Health and Family Services Cabinet
Governor Beshear Orders Immediate Action to Correct Issues Raised in Passport Health Plan Audit
Governor Steve Beshear has ordered Passport Health Plan to work with the Cabinet for Health and Family Services (CHFS), the Department for Medicaid Services (DMS) and the Department of Insurance to immediately address issues raised in a report released today by the Auditor of Public Accounts (APA). The issues relate to governance, lack of internal controls and transparency, excessive spending and conflicts of interest by Passport officials.
Since 1997, DMS has contracted with Passport, a managed care program that provides Medicaid-covered services to select Medicaid eligible members in a 16-county region that includes Jefferson and surrounding counties.
“I am surprised and disappointed that an operation whose mission was and is to provide health care to vulnerable families, children, seniors and individuals with disabilities would have spent precious dollars with such disregard for their source – the taxpayers,” said Gov. Beshear. “I am calling today for Passport to take immediate steps to review its management and cease spending a single taxpayer dollar that is not absolutely necessary to provide quality health care services to Medicaid-eligible recipients.”
Gov. Beshear has directed CHFS Secretary Janie Miller, Acting Medicaid Commissioner Neville Wise and Insurance Commissioner Sharon Clark to meet with the Board of Directors of Passport to develop an immediate plan to correct the practices addressed in the audit and tighten controls of the program. “Passport must be accountable and transparent in its handling of these issues. Funding for state agencies, in particular Medicaid, is scarce. Any waste of those dollars is completely unacceptable and will not be tolerated,” said Gov. Beshear.
“The Cabinet is extremely disappointed in the lack of financial responsibility demonstrated by Passport,” said CHFS Secretary Janie Miller. “It is essential that they work with us to restore our confidence in Passport and return the plan to one of integrity, transparency and trust.”
Gov. Beshear also has ordered that a complete financial audit of Passport and its major subcontractors be conducted as soon as possible to ensure taxpayers’ dollars are spent in accordance with the program’s original mission, which is to provide health care to Medicaid beneficiaries in an efficient, cost-effective manner necessary to control growth in Medicaid costs.
DMS has historically relied on annual independent audits of Passport that reported that the organization had in place the proper financial systems and financial reporting necessary to assure the organization was run appropriately.
Related to contract negotiations, in response to the APA report, DMS will secure an external, independent and qualified consultant to perform a cost/benefit analysis of the contract and to develop estimates of what the Medicaid costs would be in Region 3 through a fee-for-service program.
“Over the years, Passport has done many positive things in the area of health care, but they clearly have wandered off the path of being good stewards of taxpayers’ dollars,” said Gov. Beshear. “They must get back on the right path toward fulfilling their mission.”