KRS 205.6412: Rate improvement programs for certain qualifying hospitals -- Terms --

Eligibility -- Federal participation and approval required for implementation

of programs.

To the extent permitted under federal law and in addition to, and separate from, the

programs developed pursuant to KRS 205.6406, the department shall develop programs

to improve quality of and access to care for residents of the Commonwealth enrolled in

the state's Medicaid program by increasing Medicaid reimbursement rates for qualifying

hospitals in accordance with the following:

(1) A qualifying hospital shall be eligible to earn enhanced add -on payments from

Medicaid managed care organizations based on the qualifying hospital's average

commercial rate for services provided, i ncluding but not limited to inpatient

hospital services, outpatient hospital services, and professional services, if the

qualifying hospital:

(a) 1. Is a participant in the hospital rate improvement program developed

pursuant to KRS 205.6406;

2. Is a Level II, III, or IV trauma center;

3. Is located in a county in which the percentage of the county's population

enrolled in the state's Medicaid program exceeds the statewide median

Medicaid enrollment percentage for all counties as posted by the

Cabinet for H ealth and Family Services in the December edition of the

Monthly Medicaid Counts by County report for the calendar year

preceding the year in which the preprint is submitted; and

4. Has an agreement for clinical rotations to train providers with a

university-affiliated graduate medical education program; or

(b) Is a pediatric teaching hospital as defined in KRS 205.565, except that a

hospital qualifying for enhanced add -on payments under this subparagraph

shall only be eligible to receive enhanced add -on pa yments for services

delivered to a patient who is eighteen (18) years of age or younger;

(2) (a) Within sixty (60) days after July 15, 2016, the Department for Medicaid

Services shall submit a Medicaid preprint with a January 1, 2026, effective

date to the federal Centers for Medicare and Medicaid Services seeking

authorization to implement the state -directed payment program described in

this subsection.

(b) If the preprint required to be submitted under paragraph (a) of this subsection

is approved by the federal Centers for Medicare and Medicaid Services, a

qualifying hospital shall be eligible to ear n enhanced add -on payments from

Medicaid managed care organizations based on the equivalent Medicare rate

for services, including but not limited to physician and nonphysician

professional services, provided to Medicaid beneficiaries by the qualifying

hospital's affiliated physician groups or physicians or other professionals

employed by or contracted with the qualifying hospital if the qualifying

hospital has an agreement to train providers with a state -owned university -

affiliated graduate medical education program;

(3) For state-directed payments authorized under this section:

(a) There shall be an identified source of funding, which shall be separate from

the assessment authorized in KRS 205.6406 and shall not be from the general

fund, for the nonfederal share that is in compliance with the requirements of

the United States Centers for Medicare and Medicaid Services;

(b) A qualifying hospital shall be required to report the same quality measures as

are applicable under:

1. The state university teaching hos pital Medicaid directed payment plan

for the payment program authorized under subsection (1) of this section;

and

2. Similarly approved payment programs active in the Commonwealth for

the payment program authorized under subsection (2) of this section;

and

(c) Reimbursement for qualifying hospitals under this section shall only apply to

patients covered by a Medicaid managed care organization;

(4) The state-directed payment programs authorized under this section shall be separate

and distinct from any state -directed payment program authorized under KRS

205.6406, and the department shall only implement the program described in this

section if:

(a) Medicaid documentation required for federal financial participation is

approved by the United States Centers for Medicare and Medicaid Services;

(b) The United States Centers for Medicare and Medicaid Services agrees to

consider the program through its own preprint and without affecting or

altering any other state-directed payment program; and

(c) 1. A source of fund ing that complies with subsection (3)(a) of this section

has been identified and is available to meet the requirement for the

nonfederal share or state match funds for a state -directed payment

program.

2. If a source of funding for the nonfederal share or state match funds

required for a state -directed payment program becomes unavailable, the

department shall terminate the state-directed payment program;

(5) If the federal Centers for Medicare and Medicaid Services or any other federal

agency at any time af ter July 15, 2026, seeks, for any reason, to recoup funds

associated with a state-directed payment program authorized under this section:

(a) The state shall not be liable for providing reimbursement to the federal

government; and

(b) The qualifying hospit als that received a state -directed payment under this

section shall be liable for all reimbursement that may be owed to the federal

Centers for Medicare and Medicaid Services or any other federal agency; and

(6) The department shall promulgate administrati ve regulations in accordance with

KRS Chapter 13A to implement the programs described in this section.