Kentucky HB689 Medicaid State-Directed Payment Program
Summary
Kentucky HB689 establishes a Medicaid state-directed payment program requiring the Department for Medicaid Services to seek CMS authorization for payments to physician groups affiliated with qualifying hospitals. The bill mandates retroactive payments back to January 1, 2026, upon federal approval, affecting hospitals, affiliated physicians, and Medicaid managed care organizations.
What changed
Kentucky HB689 amends KRS 205.6412 to establish a Medicaid state-directed payment program for physician and nonphysician professional services at qualifying hospitals. The Department for Medicaid Services must seek CMS authorization and direct Medicaid MCOs to issue payments retroactive to January 1, 2026. The bill passed both chambers with veto overrides (House 90-1, Senate 38-0) indicating legislative urgency.
Healthcare providers affiliated with qualifying hospitals should verify their eligibility status and prepare to receive retroactive payments. The Department for Medicaid Services must submit the state-directed payment proposal to CMS for approval before implementation. MCOs will be required to issue back payments to January 1, 2026, upon federal green light.
What to do next
- Hospitals and affiliated physician groups should confirm they meet qualifying hospital criteria under the new program
- Department for Medicaid Services must submit state-directed payment authorization request to CMS
- Medicaid MCOs should prepare systems to issue retroactive payments back to January 1, 2026, pending federal approval
Source document (simplified)
ChangeBridge / Kentucky / HB689 Passed HB689 House Bill Passed 2026-03-19
AN ACT relating to the establishment of a Medicaid state-directed payment program.
Amend KRS 205.6412 to require the Department for Medicaid Services to seek authorization from the United States Centers for Medicare and Medicaid Services to implement a state-directed payment for physician and nonphysician professional services provided to a Medicaid beneficiary by a qualifying hospital's affiliated physician groups or physicians and other professionals employed or contracted by the qualified hospital; require the Department of Medicaid Services to direct Medicaid managed care organizations to issue payments back to January 1, 2026, upon federal approval; RETROACTIVE.
Bill Details
State Kentucky
Session 2026 Regular Session
Chamber House
Official Source apps.legislature.ky.gov/record/26RS/hb689....
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Sponsors
Amy Neighbors (Rep - R) Kimberly Banta (Rep - R) George Brown (Rep - D) Beverly Chester-Burton (Rep - D) Mike Clines (Rep - R) Stephanie Dietz (Rep - R) Robert Duvall (Rep - R) Kevin Jackson (Rep - R) DJ Johnson (Rep - R) Kim King (Rep - R) Scott Lewis (Rep - R) Shawn McPherson (Rep - R) Michael Meredith (Rep - R) Kimberly Moser (Rep - R) Steve Riley (Rep - R)
Action History
2026-03-31 H passed 90-1 2026-03-31 H House concurred in Committee Substitute (1) 2026-03-31 H posted for passage for concurrence in Senate Committee Substitute (1) 2026-03-31 H to Rules (H) 2026-03-31 H received in House 2026-03-31 S 3rd reading, passed 38-0 with Committee Substitute (1) 2026-03-26 S posted for passage in the Consent Orders of the Day for Friday, March 27 2026 2026-03-26 S 2nd reading, to Rules as a consent bill 2026-03-25 S reported favorably, 1st reading, to Consent Calendar with Committee Substitute (1) 2026-03-24 S to Health Services (S) 2026-03-19 S to Committee on Committees (S) 2026-03-19 S received in Senate 2026-03-18 H 3rd reading, passed 94-0 with Floor Amendment (1) 2026-03-17 H posted for passage in the Regular Orders of the Day for Wednesday, March 18 2026 2026-03-16 H floor amendment (1) filed 2026-03-06 H 2nd reading, to Rules 2026-03-05 H reported favorably, 1st reading, to Calendar 2026-02-27 H to Health Services (H) 2026-02-20 H to Committee on Committees (H) 2026-02-20 H introduced in House
Votes
2026-03-18 House: Veto Override RCS# 283 Yea: 94 Nay: 0 2026-03-31 Senate: Third Reading RSN# 4062 Yea: 38 Nay: 0 2026-03-31 House: Veto Override RCS# 403 Yea: 90 Nay: 1
Committee Referrals
2026-02-20 H Committee On Committees 2026-02-27 H Health Services 2026-03-06 H Rules 2026-03-19 S Committee on Committees 2026-03-24 S Health Services 2026-03-26 S Rules 2026-03-31 H Rules
Amendments
0000-00-00 House Floor Amendment 0000-00-00 Senate Committee Substitute
Bill Text Versions
0000-00-00 Introduced 0000-00-00 Engrossed 0000-00-00 Enrolled
Subjects
Health Care Professionals Hospitals And Health Facilities Medicaid Physicians Retroactive Legislation Legislative data powered by LegiScan (CC BY 4.0)
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