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KentuckyHB 6892026 Regular SessionHouse

AN ACT relating to the establishment of a Medicaid state-directed payment program.

Sponsored By: Amy Neighbors (Republican)

Signed by Governor

Health Care ProfessionalsHospitals And Health FacilitiesMedicaidPhysiciansRetroactive Legislation

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 2 benefits, 1 costs, 1 mixed.

New Medicaid add-on payments to hospitals

The law creates a new, separate Medicaid hospital payment program. It uses add-on payments from Medicaid managed care plans to raise what qualifying hospitals get paid. If CMS approves the preprint, hospitals that train providers with a state-owned university program get extra payments. These add-ons tie to Medicare equivalent rates and can cover hospital and professional services by affiliated clinicians.

Funding rules and hospital repayment risk

The nonfederal share must come from a source that follows CMS rules, is not the KRS 205.6406 assessment, and is not the state general fund. If that nonfederal or state match funding goes away, the Department must end the program. If a federal agency later seeks repayment for this program, the state is not liable; the hospitals that got the payments must repay.

Start date and retroactive hospital payments

Within 60 days after the law takes effect, the Department must send CMS a preprint asking for a January 1, 2026 start date. If CMS approves a retroactive January 1, 2026 date, the Department directs Medicaid managed care plans to make back payments to qualifying hospitals. These retroactive add-ons cover professional services provided on or after January 1, 2026 by the hospital’s affiliated or employed clinicians.

Which hospitals get Medicaid add-ons

To qualify, a hospital must be in the state’s hospital rate improvement program. It also must meet one of these: Level II–IV trauma center; in a county with Medicaid enrollment above the statewide median (per the Cabinet’s December report for the prior year); has clinical rotations with a university graduate medical education program; or is a pediatric teaching hospital. For pediatric teaching hospitals, add-ons apply only to patients age 18 or younger. Add-on reimbursements only apply to patients in Medicaid managed care plans. Hospitals in this program must report the same quality measures used in the state university teaching hospital plan.

Sponsors & Cosponsors

Sponsor

  • Amy Neighbors

    Republican • House

Cosponsors

  • Beverly Chester-Burton

    Democrat • House

  • DJ Johnson

    Republican • House

  • George Brown Jr.

    Democrat • House

  • Kim Banta

    Republican • House

  • Kevin Jackson

    Republican • House

  • Kim King

    Republican • House

  • Kimberly Poore Moser

    Republican • House

  • Mike Clines

    Republican • House

  • Michael Meredith

    Republican • House

  • Robert Duvall

    Republican • House

  • Stephanie Dietz

    Republican • House

  • Scott Lewis

    Republican • House

  • Shawn McPherson

    Republican • House

  • Steve Riley

    Republican • House

Roll Call Votes

All Roll Calls

Yes: 222 • No: 1

House vote • 3/31/2026

passed

Yes: 90 • No: 1

Senate vote • 3/31/2026

3rd reading, passed

Yes: 38 • No: 0

House vote • 3/18/2026

3rd reading, passed

Yes: 94 • No: 0

Actions Timeline

  1. signed by Governor (Acts Ch. 117)

    4/13/2026

  2. delivered to Governor

    4/1/2026

  3. enrolled, signed by President of the Senate

    4/1/2026House

  4. enrolled, signed by Speaker of the House

    4/1/2026House

  5. passed 90-1

    3/31/2026House

  6. House concurred in Committee Substitute (1)

    3/31/2026House

  7. posted for passage for concurrence in Senate Committee Substitute (1)

    3/31/2026Senate

  8. to Rules (H)

    3/31/2026House

  9. received in House

    3/31/2026House

  10. 3rd reading, passed 38-0 with Committee Substitute (1)

    3/31/2026Senate

  11. posted for passage in the Consent Orders of the Day for Friday, March 27 2026

    3/26/2026Senate

  12. 2nd reading, to Rules as a consent bill

    3/26/2026Senate

  13. reported favorably, 1st reading, to Consent Calendar with Committee Substitute (1)

    3/25/2026Senate

  14. to Health Services (S)

    3/24/2026Senate

  15. to Committee on Committees (S)

    3/19/2026Senate

  16. received in Senate

    3/19/2026Senate

  17. 3rd reading, passed 94-0 with Floor Amendment (1)

    3/18/2026House

  18. posted for passage in the Regular Orders of the Day for Wednesday, March 18 2026

    3/17/2026House

  19. floor amendment (1) filed

    3/16/2026House

  20. 2nd reading, to Rules

    3/6/2026House

  21. reported favorably, 1st reading, to Calendar

    3/5/2026House

  22. to Health Services (H)

    2/27/2026House

  23. to Committee on Committees (H)

    2/20/2026House

  24. introduced in House

    2/20/2026House

Bill Text

  • Current

    3/31/2026

    PDF

  • Introduced

    3/18/2026

    PDF

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