Kentucky Medicaid ties future coverage to activity and eligibility checks

Kentucky must tie Medicaid eligibility for people covered by federal rules to proof of work or other qualifying activities. Federal rules determine which Medicaid applicants and members face the main activity requirement. Volunteers of America must serve covered members in pilot areas. The main requirement follows federal rules for who is covered and which activities count. Kentucky cannot request an implementation delay without specific permission from lawmakers. If federal activity requirements are weakened or ended, Kentucky must seek federal approval for its own requirements. Those requirements apply only if approval is granted. The fallback covers adults ages 19–64 in the specified adult Medicaid coverage group or an equivalent waiver program. It excludes certain caregivers, pregnant people, people with serious medical needs, and other listed groups. Other fallback exclusions cover qualifying former foster children under 26, people eligible for Indian Health Service coverage, totally disabled veterans, people in recognized addiction recovery programs, inmates, and people with defined short-term hardships. People meeting applicable food or cash assistance work rules are also excluded. Caregiver exclusions cover children age 13 or younger and disabled people; pregnancy-related coverage is also excluded. Notices must begin by September 1, 2026. Activity requirements and pilot services must start no later than January 1, 2027. Applicants show activity for the preceding month; members show three months since their last eligibility decision at renewal.

Kentucky must review Medicaid eligibility regularly, check available records, and follow notice rules before specified removals. Six-month reviews cover people specified by federal law who are not exempt. Other checks cover Medicaid applicants and members, including eligibility for rides to medical appointments. Conflicting records indicating ineligibility trigger an initial finding that the person may appeal, where federal law permits. The state must use the latest income data and consider changing employment income. People suspected of enrollment in another state's Medicaid program get 30 days to prove Kentucky residency. Without a response, they move from managed care to Medicaid coverage paid directly by the state. A second notice gives another 30 days before removal from Medicaid. The state must attempt that second notice within 45 days of the first notice. Health plans must look monthly for members covered by related companies in other states, report their efforts, and promptly notify the state of matches. Violations carry $1,000 penalties. After returned mail, the state must search records and try at least two ways to reach the member: phone, text, or email. The search must continue for at least 30 days from the first address request to the health plan. If the address remains unknown, federal law permitting, the state removes the member pending any federally protected appeal. Six-month reviews begin January 1, 2027. Records suggesting changed eligibility trigger an additional full review. Interstate Medicaid records must be checked at least quarterly.

Kentucky Medicaid must charge specified copays and cannot cover drugs prescribed primarily for weight loss. The weight-loss drug restriction covers Kentucky Medicaid and its contracted health plans. It applies when weight loss is the drug's primary prescribed purpose. Unless federal law requires otherwise, copays apply only to members in the specified adult Medicaid coverage group whose family income exceeds 100% of the federal poverty line. Unless federal law requires otherwise, primary care, mental health care, substance use treatment, services at specified community and rural clinics, and federally exempt services are protected from these charges. Total family charges cannot exceed 5% of family income, measured monthly or quarterly as the state health secretary decides. Needed federal approval may delay the copay requirements. Coverage provisions also protect breastfeeding support and equipment, pregnancy-related remote care, and specified home-based addiction treatment for pregnant and postpartum women. Federal law can require patient charges despite these protections. The $5 copay schedule begins October 1, 2028. The prescription rule sets a $1 copay. The weight-loss drug restriction follows the law's immediate-effect clause.

People applying for Medicaid programs that provide care at home or in the community must submit medical documentation, including to join a waitlist. These rules cover federally approved Medicaid programs for home and community care. The state must reserve places for emergency needs. Reserved places in the named Home and Community Based waiver must prioritize people assessed as needing skilled nursing services. Applications need a recommendation and confirmation of the main diagnosis from a doctor, physician assistant, advanced practice nurse, or licensed psychologist. Where federal law permits, enrollment generally requires U.S. citizenship or an eligible immigration status and at least one year of Kentucky residency. People resident for less than a year may enroll in programs without waitlists. The citizenship and residency subsection exempts people enrolled before the law took effect and military members, their spouses or dependents, and veterans. The state must use nationally recognized, age-appropriate tools to assess needed care. Children already receiving services who fall within the transition exception keep the earlier assessment tool until age 18. People waitlisted on or before the effective date have 12 months from that date to submit medical documentation or lose their place. Assessment tools are due July 1, 2026. Missing emergency placement criteria must be developed by January 1, 2027.

Kentucky must apply service and payment rules to Medicaid contractors, move dental administration to a separate contractor, and give legislative staff access to program records. These provisions cover Medicaid health plans, care providers, ride brokers, dental administration, and legislative oversight. Where federal approval is necessary, affected health-plan and transportation requirements may wait for approval. Health-plan contracts entered into, renewed, or extended on or after the effective date must bar efforts to get providers to resubmit claims to raise plan payment scores. Plans cannot count inactive providers when measuring access, penalize primary care providers for unsuccessful good-faith contact attempts, or advertise Medicaid beyond identifying their participation. Plans must report member deaths within five business days. The state withholds 2% of plan payments, which plans can earn back by meeting care goals. Contract violations require enforcement, with specified minimum penalties ranging from $500 per affected claim to $10,000 per inactive provider counted. Contractor fines go into a separate fund. Unused money and interest carry forward. Spending requires lawmakers to set aside money expressly; future increases in payments to care providers are the stated goal, not a guaranteed benefit. Providers have 120 days after confirmed notice to appeal reduced or denied claims. Plans must resolve appeals within 30 days and pay amounts owed within 30 days after resolution. Plans must explain denials, supply requested supporting records free, and publish current appeal guidance and staff contacts. Existing health-plan contracts run through December 31, 2028. Replacement purchasing cannot begin before January 1, 2028; this extension section expires after March 15, 2029, unless extended. Dental administration transfers January 1, 2029. Legislative record access is due July 1, 2026.