FRANKFORT, Ky. — Kentucky lawmakers on the Medicaid Oversight and Advisory Board on Monday finalized a wide-ranging set of findings and recommendations warning that the state’s Medicaid program is financially unsustainable and in need of major structural reforms ahead of the 2026 General Assembly.
Meeting at noon in Annex Room 154, the board voted unanimously to adopt a revised report that outlines concerns about runaway costs, weak oversight of managed care organizations, gaps in provider reimbursement, and limited improvement in health outcomes despite rapid spending growth.
The board’s findings note that Kentucky’s Medicaid budget has more than doubled in five years to over $20 billion annually, while enrollment has expanded to roughly one-third of the state’s population. Members repeatedly returned to the central tension between rising expenditures and whether the system is delivering measurable improvements in health.
“This is a starting point,” one co-chair said as the meeting concluded, emphasizing that the board plans to meet monthly as lawmakers move into the 2026 session.
Key changes adopted Monday
Much of Monday’s meeting focused on line-by-line amendments to the draft report, many of them prompted by sharp exchanges over provider payments, managed care accountability, and transparency.
Among the most consequential changes approved:
- Work and community engagement requirements — The board amended language related to federal work requirements to replace references to “pilot programs” with broader “urban and rural partnership programs,” citing federal compliance deadlines tied to HR 1.
- Provider rate oversight — Members added language calling for baseline rate studies across all provider types, including dental providers, to guide future reimbursement decisions and prepare for upcoming federal changes.
- Managed care accountability — The board strengthened recommendations to impose monetary penalties on managed care organizations for audit failures and regulatory violations.
- Transparency measures — Lawmakers backed creation of a public Medicaid data dashboard, with performance indicators defined by the oversight board itself, and recommended greater access to Cabinet data for legislative analysts.
- Behavioral health reforms — The report now recommends expanding certified community behavioral health clinics statewide and examining recovery outcomes at different lengths of stay, including the role of recovery housing and coordinators.
Debate was particularly intense around provider payments, with lawmakers questioning how actuarial studies are used, whether managed care organizations negotiate fairly with providers, and why some reimbursement rates — especially dental — have remained stagnant for decades.
Several members warned that without clearer data and enforceable standards, the legislature risks “picking winners and losers” in future budgets.
What happens next
The finalized report will be posted to the legislature’s website and is expected to serve as a blueprint for Medicaid legislation in the 2026 session, including potential statutory changes, audit requirements, and budget adjustments.
The board also heard brief public comment, including from providers urging lawmakers to address delays and payment gaps that they say are forcing clinics to deliver uncompensated care.
The Medicaid Oversight and Advisory Board plans to continue meeting monthly while the General Assembly is in session. Meetings are streamed by Kentucky Educational Television and archived through the Legislative Research Commission.
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Cross-posted from the Lexington Times.
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