Center for Open Government: Humana files lawsuit against state over CHFS bungling of MCO procurement

Kentucky health insurance giant Humana filed suit today in Franklin circuit court alleging “breach of contract” by the Cabinet for Health and Family Services (CHFS) in the 2020 MCO contracting process. The Humana lawsuit claims CHFS decisions related to Molina Healthcare’s purchase of Passport Health Plan represented a ‘clear breach of the MCO agreements.’

Passport Health Plan failed to secure an MCO contract through the normal procurement process. Humana’s lawsuit alleges CHFS then allowed Passport “to auction off their members to the highest bidder” in violation of existing agreements.

Molina Healthcare announced in July 2020 it was purchasing Passport for $20m, with the potential for up to an additional $40m “performance fee” depending on the number of Passport members that signed up with Molina in 2021, according to the lawsuit.

Humana’s complaint stated the company has “fully exhausted the contract dispute process” with CHFS and the Kentucky Finance & Administration cabinet and is entitled to bring their legal action seeking “specific enforcement and/or damages.”

The Center for Open Government has reported extensively on the Beshear administration’s mismanagement of the MCO procurement process and questionable bidding practices by Molina Healthcare. Our archived reporting can be found at the Bluegrass Institute’s blog page.

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Link to the Humana lawsuit filed today in Franklin Circuit Court: Humana Health Plans, Inc. v. Commonwealth of Kentucky.