Kentucky Governor Orders Passport Health Plan Revamp

Steven Bobson, Europe & Americas Editor
December 02, 2010 /

A state audit last month that has indicated overspending at Passport Health Plan forced Kentucky Governor Steve Beshear to order for a revamp in the management of the care provider.

Excessive spending on entertainment and lobbying emerged as the state released its audit, showing a “weak ethical policies and numerous conflicts of interest” in the policies of Passport Health Plan.

The state audit’s findings prompted Beshear to call for the resignation of Passport’s chairman of the board. Passport Health Plan, which has the largest state contract with the government amounting to $793 million in the last fiscal year, will be headed for a year by its interim CEO Mark Carter following the resignation of the previous chief executive officer and president.

Beshear also extends the revamp to include termination of every top-level management. The board of the Louisville-based care provider seeks to eradicate expenditures on lobbying in the future and to re-open the recently closed meetings with the press. It will also open the Medicaid managed care provider to the public and will hire an internal auditor.

Kentucky State Auditor Crit Luallen stressed the goal of Passport’s policies in his report, saying the care provider should exert more effort to address the rising costs of Medicaid. Luallen also called for Passport to enhance its “accountability and transparency.”

Luallen disclosed the findings of the city auditors who reported the frequent traveling of the staff, check-ins at luxury resorts, extravagant meals at restaurants, and expenditures on many gifts all funded by Medicaid.

The audit report also noted the benefits enjoyed by Passport’s original investors from cash distributions, adding that it favored organizations like the University of Louisville and Jefferson County providers.

Beshear ordered the revamp following a meeting at his office with Passport’s current investors on Wednesday.


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