Department of Insurance asks Passport to tighten reporting, conflicts of interest

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — The Kentucky Department of Insurance wants the Passport Health Plan to require more of its staff to report conflicts of interest and also wants more reporting on how some grant money is spent.

The recommendations came out of an insurance audit of Passport Health Plan, which was the subject of a scathing state audit in November that questioned the organization’s management. Passport Health Plan is currently the only Medicaid managed health care plan in Kentucky, serving more than 160,000 poor people in Jefferson and 15 counties.

An order issued by the Department of Insurance and obtained by the Herald-Leader through an Open Records request, asks that Passport report and track grants it gives to organizations for reimbursements for providing health care to the poor, a key finding in State Auditor Crit Luallen’s audit in November. The organization had given $20 million in 2008 and 2009 to health care organizations that were founding members of the Passport Health Plan. But state auditors found that there was little or no documentation that the money had been used to treat the poor.

The order asks that if Passport gives grants for indigent care in the future, that those grants only be given directly to the organization that provides the indigent care. It also asks that Passport require detailed reporting from the grant recipients on how that money was spent.

The order, signed April 20, also asks that Passport obtain signed, annual conflicts of interest forms from all Passport staff, managers of AmeriHealth Mercy, its third-party administrator, and Passport board members. State auditors found that top Passport executives had contracts with AmeriHealth Mercy, which runs the day-to-day operations of Passport. Those conflicts of interest, as well as questionable spending on lobbyists, travel and food eventually led to the ouster of the two top executives as well as the president of the Passport board.

Passport did not dispute the Department of Insurance’s findings, according to the order. In a statement released Thursday, Passport said it was planning to comply with all of the issues raised in the Department of Insurance audit. Since November, Passport has hired a new interim chief executive and a corporate compliance officer.

The Department of Insurance, which monitors all insurance companies in the state, announced that it was going to do its own audit of Passport in January.

Filed Under: Crit Luallen • Featured • Social Services • State Budget • State Government