Kentucky boosts Medicaid payment rates for outpatient procedures

Gov. Andy Beshear was joined by health care leaders and lawmakers in the Capitol Rotunda for a bill-signing ceremony honoring the passage of legislation that expands health care services for Kentuckians.

The measure, House Bill 75, also supports Kentucky's hospitals by boosting Medicaid payment rates for outpatient procedures performed at hospitals. The law is expected to provide needed budgetary support for hospitals, especially the state's rural health care facilities.

"More than any other entity, Kentucky's hospitals have felt the strain of increased demand on resources and services as we've dealt with the impacts of a global pandemic over the past three years as well as devastating weather events," said Gov. Beshear. "We must do everything we can to support our hospitals and ensure they are equipped to provide the services and care needed in their communities. I am thrilled to sign HB 75 into law, ensuring that our hospitals, especially our rural providers, can continue to improve health outcomes for all our Kentucky families."

"HB 75 is aimed at improving access to quality health care to each and every Kentuckian as well as serving as a lifeline to rural hospitals serving communities throughout our commonwealth," said Rep. Brandon Reed of Hodgenville. "With HB 75 now granting access to hospitals to be reimbursed for outpatient services, hospitals will be able to harness federal resources while using those state funds. This measure simply builds on legislation we approved in 2019 with Rep. Bam Carney, and 2021 with HB 183. I thank the Kentucky Hospital Association, which once again trusted me with their legislation, and my primary co-sponsor, Dr. Danny Bentley, for his help and guidance through this process. Thank you to the many co-sponsors on both sides of the aisle and thank you to our governor for your approval."

The new law, which was supported by the Kentucky Hospital Association (KHA), requires the state's Department for Medicaid Services to assess outpatient services and provide additional payments to hospitals to reduce payment gaps between Medicaid reimbursements and what would be paid by private health insurance. The measure also allows Medicaid to create a hospital rate increase program for individuals enrolled in its fee-for-service program to pay up to the upper payment limit of the federal Medicare program. The legislation is retroactive to Jan. 1, 2023.

"The passage of HB 75 and the Governor signing the bill into law will help to strengthen and stabilize hospitals and health systems throughout the

Commonwealth, especially those in rural areas of Kentucky who have been historically vulnerable," said Donald H. Lloyd II, President/CEO of St. Claire HealthCare in Morehead.

"Hospitals are on the front lines of Kentucky's health care system and are absolutely vital to our state and ensuring that all Kentuckians have access to lifesaving services and care," said Cabinet for Health and Family Services Secretary Eric Friedlander. "We are excited to launch this program to provide additional support to the commonwealth's hospital community and ensure members of the Medicaid program have access to quality treatment and care – whenever they need it."

"The Kentucky Medicaid program serves one out of every three Kentuckians," said Department for Medicaid Services Commissioner Lisa Lee. "The additional funding provided through HB 75 will allow hospitals to continue to deliver quality care designed to improve the lives of those we serve and, as a native of Eastern Kentucky, I am excited for the opportunities this legislation will provide for our rural communities."

"The Kentucky Hospital Association and its member hospitals are grateful to bill sponsor Brandon Reed and Sen. Steve Meredith for being champions of rural hospitals, along with the legislative leadership and Gov. Beshear for their support in making HB 75 a reality," stated KHA President & CEO Nancy Galvagni. "HRIP has been a lifeline for the state's hospitals as they faced the most challenging financial times in recent history. Adjusting the program to include outpatient care for Medicaid patients will further the program's goal, especially in rural hospitals. Keeping the doors open ensures all Kentuckians will continue to have access to the quality care they need."