Consumer Advocates Worry New Medicaid Operators in Louisville Region Will Cause Problems

By Kenny Colston, WFPL

The Louisville Medicaid region will now be home to four different managed care operators. State officials announced the change today.

Joining Passport Health Plan is Humana, CoventryCares and WellCare.

WellCare and Coventry already have statewide contracts for Medicaid and Passport has operated in Louisville for years.

Passport officials say they will still try to continue maintain their high level of care, despite no longer holding an exclusive contract for the region. 

But the new dynamic has consumer advocates like Kentucky Voices for Health’s Jodi Mitchell saying patients are likely to see their quality of care decline.

“That’s really where it comes down to not consumer choice, but who the provider contracts with, because we have seen across the state where there are hospitals who chose to not do business with some of the managed care companies,” she says.

She points to Coventry as one example. The company has broken contracts with many hospitals statewide. And that could affect its provider contracts in Louisville as well.

The new organizations will officially start insuring Medicaid patients on Jan. 1


Humana, Passport Join Two Others as New Louisville Medicaid Operators

By Kenny Colston, WFPL

After decades of having one company oversee Medicaid, the Louisville area will now have four private Medicaid providers.

The Louisville area was the first part of the state to have Medicaid privatized, and Passport Health Plan has administered the program ever since.

But the rest of the state has since been privatized, and multiple operators compete for patients across the commonwealth.

The Cabinet for Health and Family Services announced today that Passport will now have competition from CoventryCares, WellCare and Humana.

Medicaid patients will be automatically assigned by the Cabinet to their new insurance provider, with letters informing people of their provider being sent out by November 1st.

The new MCOs will start managing on January 1st.




Humana’s McCa…


Humana’s McCallister Says He’s Open to Billion-Dollar Deals

January 27, 2012, 2:58 AM EST

By Jeffrey McCracken and Sarah Frier

(Updates with closing share price in the fifth paragraph. See DAVOS <GO> for more on the World Economic Forum.)

Jan. 26 (Bloomberg) — Humana Inc., the second-largest Medicare provider, is willing to spend $1 billion for deals that would enable the company to expand in the U.S. government program, Chief Executive Officer Michael McCallister said.

“We could do $1 billion-plus deals if we wanted to,” McCallister said in an interview at the World Economic Forum’s conference in Davos, Switzerland. “We have a lot of capacity for something of that size. We’ve acquired a number of small plans but we are open to something that expands us in Medicare.”

The U.S. health-care law puts pressure on how much insurers can be reimbursed for care and is expected to hurt profit margins, said Chris Rigg, an analyst with Susquehanna Financial Group in New York. Increasing the size of Humana’s Medicare business, which already brings in more than $20 billion each year, would help with costs, McCallister said.

Universal American Corp., Coventry Health Care Inc. and Health Net Inc. are among companies focused on Medicare, the government’s health plan for the elderly and disabled, said Michael Manns, a Bloomberg Industries analyst. The companies, with market values more than $1 billion, are the size Humana would need to make an effect on earnings, Rigg said. Humana probably will look at closely held companies, he said.

Humana fell 2.7 percent to $87.11 at the close in New York. In 2010 and 2011, Humana was the best performer of the six companies in the S&P 500 Managed Health Index.

Stock Prices

Universal, based in Rye Brook, New York, fell 3.6 percent to $10.87. Coventry, based in Bethesda, Maryland, fell 2.7 percent to $29.54. Health Net, based in Woodland Hills, California, gained less than 1 percent to $35.81. None of the companies returned calls requesting comment.

Humana has acquired several smaller health insurers to expand in Medicare.

Aetna Inc.’s Chief Executive Officer Mark Bertolini said earlier this month that he is looking for deals in government programs. Cigna is buying HealthSpring Inc., which had more than $1.3 billion in revenue from Medicare in the third quarter. UnitedHealth Group Inc., the largest insurer and Medicare provider by revenue, will continue to get bigger, Rigg said.

“The market thinks there needs to be more consolidation in the managed-care area and it might be right,” McCallister said. “There are a lot of small players with 20,000 to 150,000 members and they will continue to be bought up.”

–Editors: Angela Zimm, Andrew Pollack

To contact the reporters on this story: Jeffrey McCracken in Davos, Switzerland at; Sarah Frier in New York at

To contact the editor responsible for this story: Reg Gale at