Kentucky Governor Reverses Medicaid Reimbursement Cuts

FRANKFORT, Kentucky—Kentucky Gov. Andy Beshear announced that the state will use a $255 million budget surplus to reverse a planned 4% cut to Medicaid reimbursement rates.

Beshear said $255 million from the taxes, as well as additional revenue, will delay any cuts to Medicaid reimbursement through this fiscal year, which ends at the end of June 2027. Beshear said it will also fund the state’s senior meal program and Michelle P. Waiver slots, which are Medicaid waivers for Kentuckians with intellectual or developmental disabilities who need nursing facility or immediate care facility level of care.

“Thanks to strong fiscal management by my administration and a strong economic surge late in the fiscal year, we turned a $156 million deficit into a $476 million surplus,” Beshear said. “Additional good news … we believe that the surge is going to continue.”  

This news comes after hundreds of Kentucky residents gathered in Frankfort for a reversal of the cuts, especially those affecting Medicaid waivers. The Beshear administration had, in June, informed various providers they would see a 4% reduction in Medicaid reimbursement starting Aug. 1. Beshear said new notices will go out to providers “shortly.”

The American Association for Homecare (AAHomecare) worked with the Kentucky Medical Equipment Suppliers Association (KMESA) and key industry stakeholders to help shape their outreach to Beshear on this issue. The associations said they will continue to monitor Kentucky Medicaid rate developments and will share additional detail, including confirmation of the effective date and any formal state guidance, as it becomes available. AAHomecare advised members with Kentucky Medicaid business should watch for a follow-up communication once rates are confirmed.