KentuckyHB 6952025 Regular SessionHouseWALLET

AN ACT relating to the Medicaid program and declaring an emergency.

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Bill Overview

Analyzed Economic Effects

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

Community engagement rules for Medicaid adults

Kentucky must seek federal approval for mandatory Medicaid community engagement within 90 days after the law takes effect. Requirements apply only with federal approval and as federal law allows. The target group is adults ages 19–59, enrolled for over 12 months, whom the cabinet finds able to work. Adults primarily caring for a dependent child under 18 or a dependent disabled adult relative are excluded. Job placement assistance counts toward participation. The cabinet must share participants’ names and contact information with the Education and Labor Cabinet monthly and provide quarterly waiver updates.

Medicaid restores behavioral health approval rules

Kentucky must restore Medicaid behavioral health prior approval requirements that were required on January 1, 2020. The deadline is 90 days after the law takes effect. If a state plan amendment is needed, the delay lasts only until federal approval. People seeking affected services face an approval step before care is authorized.

Public scorecards for Medicaid treatment providers

The cabinet must create a scorecard for behavioral health and substance use treatment services and providers. Every Medicaid managed care company must use it. Each company must post the scorecard on its website by December 31, 2025. The scorecard provides public information but does not guarantee services or treatment results.

Dedicated fund keeps Medicaid drug rebates

The law creates a restricted Medicaid pharmaceutical rebate fund within the cabinet. Specified rebates and compensation from drugmakers, the state pharmacy benefit manager, and other Medicaid contractors must enter the fund. Amounts owed to the federal government are excluded. The department must spend fund money according to federal law. Balances at the close of state budget years 2024–2025 and 2025–2026 carry forward rather than expire. The law sets no dollar amount or direct change to household drug costs.

Legislative approval required for Medicaid changes

The cabinet generally needs legislative approval before creating a Basic Health Program or making covered Medicaid waiver or state plan changes. This includes changes to eligibility, coverage, or benefits. Approval requests need spending and savings estimates covering at least two consecutive state budget years. Waiver renewals also need an effectiveness and necessity review at least 12 months before expiration. Federally required changes are exempt from prior approval, but fiscal assessments are due 90 days beforehand. Emergency changes last only through the relevant declaration. Specified existing federally approved directed or supplemental payment programs and the preferred drug list are exempt from approval and assessment requirements.

More access to Medicaid spending records

Managed care contracts signed on or after the law’s effective date must require spending data by service type, including outside administrators. Contracts without that rule are invalid, and vendors cannot be paid under them. The department must compile statewide actual spending, report quarterly to lawmakers, and provide spending estimates on request. Managed care companies submit quarterly data within 60 days; department reports have 90-day deadlines, with certain reports due within 75 days. Company records about Kentucky Medicaid and its money are subject to public records requests. State disclosure exceptions still apply, and records protected from release by federal health privacy law remain excluded.

New board oversees Kentucky Medicaid

The law creates a Medicaid Oversight and Advisory Board within the Legislative Research Commission, which funds its work. It includes 10 voting lawmakers and nonvoting members and must meet at least six times yearly. The board reviews Medicaid benefits, access, payments, financing, and care delivery, then recommends changes to lawmakers. It can require needed information, including contracts, from specified agencies, managed care companies, the pharmacy benefit manager, and other contractors. It sets reporting formats and deadlines, holds hearings, uses outside experts, and can request audits by the state auditor.

New rules for Medicaid care contracts

Kentucky may use fee-for-service, managed care, or other federally allowed Medicaid delivery models, including several models at once. Managed care contracts in effect when the law takes effect remain valid. The department must procure new managed care contracts that take effect no later than January 1, 2027. A company that failed either specified 2024 reporting requirement during state budget year 2025–2026 cannot receive a contract. These rules do not themselves change member eligibility or benefit amounts.

Sponsors & Cosponsors

Sponsor

Adam Bowling
Republican • House

Cosponsors

Josh Bray
Republican • House
Jason Petrie
Republican • House

Roll Call Votes

All Roll Calls

Yes: 218 • No: 53

Senate vote • 3/27/2025

passed

Yes: 29 • No: 7

House vote • 3/27/2025

passed

Yes: 80 • No: 20

Senate vote • 3/14/2025

3rd reading, passed