Audit Led to Crisis Which Led to Loss of Influence and Reputation

I wrote several times a year ago about a crisis at Passport Health Plan. The fallout of that misguided use of tax dollars continues to be an expensive crisis.

Passport provides Medicaid services for more than 170,000 Kentucky residents. In a blog post on March 13, I wrote,"A state audit said the executive vice president and associate vice president received large salaries, ate in expensive restaurants, and traveled extensively. In addition, the report said Passport spent money inappropriately on lobbying and public relations and donated hundreds of thousands to causes that had nothing to do with health care. The two people alluded to above were fired, the governor ordered an investigation, and elected officials continue to look over the organization's shoulder." (http://www.blogger.com/blogger.g?blogID=1573781346072455735#editor/target=post;postID=6921230592244927587)

The state is still looking and now is seeking other bidders to run the program and end Passport's state charter to provide services alone. "Kentucky began the process this week of contracting with multiple companies to provide Medicaid services in the region that has been served exclusively by Passport Health Plan for the past 15 years. The state began advertising Tuesday for proposals from insurance companies to provide managed-care services for Medicaid in Jefferson and 15 surrounding counties." (http://www.courier-journal.com/apps/pbcs.dll/article?AID=2012306200107&nclick_check=1)

A spokeswoman for the Kentucky Cabinet for Health and Family Services said the state intends to select at least two companies to provide Medicaid services in the region beginning January 1. Federal officials decided last year that Medicaid beneficiaries in the region must be given a choice of managed-care organizations. A waiver that has allowed Passport to be the exclusive Medicaid provider in the region was not extended past this year.

A crisis poorly managed -- and that includes state audits of tax-spending organizations -- can lead to deep-seated changes and loss of business and influence. The same can happen in the private sector when stakeholders such as customers and shareholders decide to take their money elsewhere. An effective crisis communications plan can help you prepare so that you can recover your business.