Passport Health Plan and State Continue Negotiations Over Medicaid Funding Increase

Facing an "uncertain future," Passport Health Plan, Kentucky's Medicaid managed care program, has asked the state for a 10% funding increase, Business First of Louisville reports. Although the state has proposed a 3% increase for the program, Bill Wagner, an ex-officio board member of University Health Care, which holds Passport's HMO license, said that any increase less than 10% "would not cover (Passport's) increasing costs of providing ... services." Responding to Wagner's assertion, state Medicaid Commissioner Dennis Boyd said that Passport, which serves 115,000 Kentuckians in 16 counties, is required to provide only "a basic array of services," and that some of the services currently offered "aren't mandated by the state." The services "at risk" of being cut are those offered "exclusive[ly] to local Medicaid members" by Philadelphia-based AmeriHealth Mercy Health Plan, which manages Passport for UHC. These services include a 24-hour nurse hotline, a case-management program and a perinatal program helping ensure a child's health at and after birth. Wagner said he expects the Passport funding negotiations to continue "for another month or so," while Boyd expressed belief that an agreement could be reached "within the next two weeks." Meanwhile, Passport Vice President of Public Affairs Jill Bell said members of the board of directors of University Health Care would discuss fallback options should Passport not receive the additional funding.

More Money Needed
Adding to the concerns over Passport funding, state Budget Director James Ramsey has notified state officials that Kentucky's Medicaid program is expected to run a $82 million deficit for FY 2001, with a $281 million shortfall projected next year. According to Wagner, the deficit largely is due to "skyrocketing" drug costs. In addition, the state's "aggressive outreach campaign to identify eligible members for the Kentucky Children's Health Insurance Program" also contributed to the deficit, as the process identified a number of families eligible for but not enrolled in Medicaid. As a result, Wagner said, the increased Medicaid enrollment has put increased financial pressure on the state. Expenditures for Passport also include providing "safety net" funding to several primary care centers that see a high number of indigent patients. However, Passport's programs overall have saved the state about $27 million over the past few years, according to Wagner, making preservation of the plan "in the state's best interests" (Bittenbender, Business First of Louisville, 2/23).