Anthem and Passport appeal Beshear administration’s decision kicking them out of state’s Medicaid business as of Jan. 1

By Lisa Gillespie
Kentucky Health News

Passport Health Plan and Anthem Kentucky, twice denied by different governors the chance to keep managing Medicaid coverage for many Kentuckians, are appealing again.

Enrollees with coverage from either plan – close to half a million people – will have to switch insurers at the end of the year unless Passport and Anthem are successful in their appeals.

They had lost prior bids under Republican Gov. Matt Bevin, amid charges of political motivation that he denied. The insurers had hoped that under Democratic Gov. Andy Beshear, the outcome would be different.

But it wasn’t. Giant United Healthcare and California-based Molina are the new winners, while WellCareAetna and Humana had their contracts renewed. A month ago Beshear’s administration tapped the five companies to run Medicaid benefits to over a million enrollees, for payments of at least $8 billion a year, with about 80 percent of the money coming from the federal government.

Anthem and Passport allege that the state violated the law by failing to follow all the rules of the selection process. Those violations included not holding oral presentations at which the insurers could have answered questions and gained points from state scorers. The state, according to the appeals, also didn’t score parts of their applications where they might have racked up points.

The Cabinet for Health and Family Services used the same people to score the applications under Bevin and Beshear, according to an email obtained by Kentucky Health News. Passport’s appeal mentions this possibility, and says that this led to unfair scoring.

“Bias from Bevin-administration holdovers improperly favored bidders with a national, rather than local, presence, including comments giving competitors praise for the length of their entire corporate existence, without regard to their history in Medicaid … with no acknowledgement of Passport’s decades of Kentucky-based experience,” Passport’s appeal says.

Passport was a nonprofit formed in 1997 to help transition Kentucky into letting outside health insurers manage Medicaid care. The goal was to save taxpayers money. It no longer holds that nonprofit status; last year publicly traded firm Evolent Health bought Passport. But it is still headquartered in Louisville, and Evolent planned on relocating many employees to a new office building in western Louisville. Molina has pledged to take it over.

According to Louisville Business First, Anthem’s protest includes a focus on how close it was to beating out Molina. Here are the scores for all bidders:

  • WellCare Health Insurance of Kentucky: 1,662
  • Aetna Better Health of Kentucky: 1,653
  • Humana Health Plan Inc: 1,605
  • UnitedHealthcare Community Plan of Kentucky: 1,520.5
  • Molina Healthcare of Kentucky: 1,507
  • Anthem: 1,491
  • Passport: 1,409.5

The appeals by Passport and Anthem were expected. Such appeals aren’t out of the ordinary when insurers lose contracts; it’s common for losing companies to appeal decisions, eventually ending up with lawsuits in court that can take years to settle.

A spokeswoman for the state Finance and Administration Cabinet didn’t reply to Kentucky Health News Thursday but earlier told Business First that the agency couldn’t comment on the process because it is “preliminary and ongoing.”

Previous Article
Next Article