Legislators seek to examine Kentucky Medicaid for ways to contain costs
Rep. Adam Bowling, R-Middlesboro, presents legislation aimed at containing Medicaid costs in Kentucky, which he told the House are "just not sustainable," March 4, 2025. (LRC Public Information)
FRANKFORT — Medicaid — the federal-state program that provides health care to almost 1.5 million Kentuckians — is on the chopping block in Washington and could soon come under examination in Frankfort.
The House has approved creating a 21-member Medicaid Oversight and Advisory Board to look for ways to rein in Kentucky Medicaid cost increases.
Meanwhile, the Beshear administration would be barred from making any changes to Medicaid eligibility, coverage or benefits in Kentucky without first getting a green light from the General Assembly unless the changes are required by federal law.
The House also voted to reinstate prior authorization requirements for Medicaid behavioral health benefits which include treatment for substance use disorder.
Rep. Adam Bowling, R-Middlesboro, the sponsor of House Bill 695, said the legislation is necessary because of unsustainable growth in Medicaid's cost.
'Roughly one out of three Kentuckians is currently enrolled in Medicaid. … It's the second largest general fund unit within our state budget. And the growth we are seeing currently is at a rate … it's just not sustainable,' Bowling said. 'So all we are trying to do with House Bill 695 is just stabilize the program, hold it where it is today.'
The House approved HB 695 by an 80-19 party line vote on March 4 while Bowling's House Bill 9 creating the oversight board was approved 99-0.
Democrats opposed the requirement for prior authorizations to receive mental health care. Rep. Lindsey Burke, D-Lexington, called it a 'bridge too far.'
HB 695 gives the Cabinet for Health and Family Services 90 days after the bill becomes law to 'reinstate all prior authorization requirements for behavioral health services in the Medicaid program that were in place and required' on Jan. 1, 2020.
During the House debate, Burke said, 'When someone has made the brave and courageous decision to come to seek mental health treatment, they are often in a position where they need immediate service. And it troubles me to think that we've asked someone who has made that courageous decision to wait and see if their insurance will cover it. Our citizens are already experiencing a mental health epidemic, and we know that prior authorization slows down essential treatment for Kentuckians.'
Emily Beauregard, the executive director for Kentucky Voices for Health, opposed the prior authorization requirement during a Feb. 25 committee meeting, saying quick access to mental health care can avert costlier medical crises.
'We know from years of experience that prior authorizations can delay access to behavioral health services for individuals facing an acute need and for conditions like depression, anxiety and substance use disorder, early intervention is crucial to improving health outcomes and reducing the need for higher cost services such as emergency room visits or inpatient hospitalization.' she said.
However a group of independent treatment providers supports the reinstatement of prior authorizations, saying they will help ensure that available funds go to help those most in need.
John Wilson, president of the Kentucky Association of Independent Recovery Organizations, told the Lantern that 'bad actors' during the COVID-19 pandemic 'exploited the system.' That, he said, led to 'unnecessary services and payments – with little to no respect given to patient care or outcomes.'
'We recognize the additional burden prior authorizations bring to providers, but this important tool to control waste, fraud and abuse has already been reinstituted in other areas of health care,' Wilson said. 'KAIROS believes that reinstituting prior authorizations will ensure that the available funds are spent on those who need it most. In fact, many KAIROS members did not change their own policies and procedures regarding prior authorizations during the suspension and continued to function as though authorizations were still required.'
Kentucky Medicaid already has restored some mental prior authorization requirements which were suspended during the COVID-19 pandemic.
Kendra Steele, a spokeswoman for the Cabinet for Health and Family Services, said 'changes were made to specific services and additional changes are on track to be implemented in the near future' following the COVID-induced pause for those prior authorizations.
'When the policy is reinstated, (the Department for Medicaid Services) will work to ensure Medicaid members continue to receive the appropriate level of care needed in a timely manner,' Steele said, adding that the state 'is committed to ensuring health care access for Kentuckians, including access to behavioral health services, counseling and treatment for addiction.'
During the Feb. 25 meeting, Rep. Jason Petrie, chairman of the House budget committee, likened HB 695 to a 'type of triage to put a stasis on the program so that it doesn't grow uncontrollably, ineffectively and inefficiently in the very, very short term, until the Medicaid Oversight Advisory Board can get on its feet and start making better make informed policy decisions, along with executive branch and participants in this big program.'
The advisory board would be made up of 10 lawmakers (five from the Senate and five from the House) and 11 non lawmakers including the state's chief medical officer, the state auditor, the chair of the Advisory Council for Medical Assistance and others. Its job would be to 'review, analyze, study, evaluate, provide legislative oversight, and make recommendations to the General Assembly regarding any aspect of the Kentucky Medicaid program.'
Bowling told the committee that HB 9 is 'a good way to get the executive branch, the legislative branch and then stakeholders as well, all at the table, to be able to go through all these issues that have come up surrounding Medicaid.'
Bowling pointed out the legislature must 'figure out how to piece the funding' for Medicaid changes made by the administration.
'We want to come together with the executive branch to make sure we have a better idea and we can make more educated decisions about which changes we want to implement and which changes are not in Kentucky's best interest, as we see it,' he said.
Medicaid in Kentucky costs taxpayers about $15 billion a year. Most of that money — 70% to 90% — comes from the federal government. Medicaid pays for medical and nursing home care for low income people and people who have disabilities, including 4 in 9 Kentucky children, according to KFF, a nonprofit research organization focused on health care.
In Washington, Rep. Brett Guthrie of Kentucky is chairman of a U.S. House committee that's looking for ways to cut $880 billion from the federal budget to pay for extending tax cuts enacted in 2017 — a task that is considered impossible without cutting Medicaid which costs the federal government more than $600 billion a year.
SUPPORT: YOU MAKE OUR WORK POSSIBLE
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
31 minutes ago
- Yahoo
‘Expensive and complicated': Most rural hospitals no longer deliver babies
A mother prepares her infant son for bed. Since 2020, 36 states have lost at least one rural labor and delivery department. In rural counties, the loss of hospital-based obstetric care is associated with increases in births in hospital emergency rooms, less prenatal care and higher rates of babies being born too early. (Photo by) Nine months after Monroe County Hospital in rural South Alabama closed its labor and delivery department in October 2023, Grove Hill Memorial Hospital in neighboring Clarke County also stopped delivering babies. Both hospitals are located in an agricultural swath of the state that's home to most of its poorest counties. Many residents of the region don't even have a nearby emergency department. Stacey Gilchrist is a nurse and administrator who's spent her 40-year career in Thomasville, a small town about 20 minutes north of Grove Hill. Thomasville's hospital shut down entirely last September over financial difficulties. Thomasville Regional hadn't had a labor and delivery unit for years, but women in labor still showed up at its ER when they knew they wouldn't make it to the nearest delivering hospital. 'We had several close calls where people could not make it even to Grove Hill when they were delivering there,' Gilchrist told Stateline shortly after the Thomasville hospital closed. She recalled how Thomasville nurses worked to save the lives of a mother and baby who'd delivered early in their ER, as staff waited for neonatal specialists to arrive by ambulance from a distant delivering hospital. 'It would give you chills to see what all they had to do. They had to get inventive,' she said, but the mother and baby survived. Now many families must drive more than an hour to reach the nearest birthing hospital. Nationwide, most rural hospitals no longer offer obstetric services. Since the end of 2020, more than 100 rural hospitals have stopped delivering babies, according to a new report from the Center for Healthcare Quality & Payment Reform, a national policy center focused on solving health care issues through overhauling insurance payments. Fewer than 1,000 rural hospitals nationwide still have labor and delivery services. A small town tries to revive its hospital in the middle of a rural health crisis Across the nation, two rural labor and delivery departments shut their doors every month on average, said Harold Miller, the center's president and CEO. 'It's the perfect storm,' Miller told Stateline. 'The number of births are going down, everything is more expensive in rural areas, health insurance plans don't cover the cost of births, and hospitals don't have the resources to offset those losses because they're losing money on other services, too.' Staffing shortages, low Medicaid reimbursement payments and declining birth rates have contributed to the closures. Some states have responded by changing how Medicaid funds are spent, by allowing the opening of freestanding birth centers, or by encouraging urban-based obstetricians to open satellite clinics in rural areas. Yet the losses continue. Thirty-six states have lost at least one rural labor and delivery unit since the end of 2020, according to the report. Sixteen have lost three or more. Indiana has lost 12, accounting for a third of its rural hospital labor and delivery units. In rural counties the loss of hospital-based obstetric care is associated with increases in births in hospital emergency rooms, studies have found. The share of women without adequate prenatal care also increases in rural counties that lose hospital obstetric services. And researchers have seen an increase in preterm births — when a baby is born three or more weeks early — following rural labor and delivery closures. Babies born too early have higher rates of death and disability. The decline in hospital-based maternity care has been decades in the making. Traditionally, hospitals lose money on obstetrics. It costs more to maintain a labor and delivery department than a hospital gets paid by insurance to deliver a baby. This is especially true for rural hospitals, which see fewer births and therefore less revenue than urban areas. 'It is expensive and complicated for any hospital to have labor and delivery because it's a 24/7 service,' said Miller. A labor and delivery unit must always have certain staff available or on call, including a physician who can perform cesarean sections, nurses with obstetric training, and an anesthetist for C-sections and labor pain management. You can't subsidize a losing service when you don't have profit coming in from other services. – Harold Miller, president and CEO of the Center for Healthcare Quality & Payment Reform 'There's a minimum fixed cost you incur [as a hospital] to have all of that, regardless of how many births there are,' Miller said. In most cases, insurers don't pay hospitals to maintain that standby capacity; they're paid per birth. Hospitals cover their losses on obstetrics with revenue they get from more lucrative services. For a larger urban hospital with thousands of births a year, the fixed costs might be manageable. For smaller rural hospitals, they're much harder to justify. Some have had to jettison their obstetric services just to keep the doors open. 'You can't subsidize a losing service when you don't have profit coming in from other services,' Miller said. And staffing is a persistent problem. Harrison County Hospital in Corydon, Indiana, a small town on the border with Kentucky, ended its obstetric services in March after hospital leaders said they were unable to recruit an obstetric provider. It was the only delivering hospital in the county, averaging about 400 births a year. And most providers don't want to remain on call 24/7, a particular problem in rural regions that might have just one or two physicians trained in obstetrics. In many rural areas, family physicians with obstetrical training fill the role of both obstetricians and general practitioners. Even before Harrison County Hospital suspended its obstetrical services, some patients were already driving more than 30 minutes for care, the Indiana Capital Chronicle reported. The closure means the drive could be 50 minutes to reach a hospital with a labor and delivery department, or to see providers for prenatal visits. A fifth of Americans are on Medicaid. Some of them have no idea. Longer drive times can be risky, resulting in more scheduled inductions and C-sections because families are scared to risk going into labor naturally and then facing a harrowing hourlong drive to the hospital. Having fewer labor and delivery units could further burden ambulance services already stretched thin in rural areas. And hospitals often serve as a hub for other maternity-related services that help keep mothers and babies healthy. 'Other things we've seen in rural counties that have hospital-based OB care is that you're more likely to have other supportive things, like maternal mental health support, postpartum groups, lactation support, access to doula care and midwifery services,' said Katy Kozhimannil, a professor at the University of Minnesota School of Public Health, whose research focuses in part on maternal health policy with a focus on rural communities. Medicaid, the state-federal public insurance for people with low incomes, pays for nearly half of all births in rural areas nationwide. And women who live in rural communities and small towns are more likely to be covered by Medicaid than women in metro areas. Experts say one way to save rural labor and delivery in many places would be to bump up Medicaid payments. As congressional Republicans debate President Donald Trump's tax and spending plan, they're considering which portions of Medicaid to slash to help pay for the bill's tax cuts. Maternity services aren't on the chopping block. But if Congress reduces federal funding for some portions of Medicaid, states — and hospitals — will have to figure out how to offset that loss. The ripple effects could translate into less money for rural hospitals overall, meaning some may no longer be able to afford labor and delivery services. Abortion-ban states pour millions into pregnancy centers with little medical care 'Cuts to Medicaid are going to be felt disproportionately in rural areas where Medicaid makes up a higher proportion of labor and delivery and for services in general,' Kozhimannil said. 'It is a hugely important payer at rural hospitals, and for birth in particular.' And though private insurers often pay more than Medicaid for birth services, Miller believes states shouldn't let companies off the hook. 'The data shows that in many cases, commercial insurance plans operating in a state are not paying adequately for labor and delivery,' Miller said. 'Hospitals will tell you it's not just Medicaid; it's also commercial insurance.' He'd like to see state insurance regulators pressure private insurance to pay more. More than 40% of births in rural communities are covered by private insurance. Yet there's no one magic bullet that will fix every rural hospital's bottom line, Miller said: 'For every hospital I've talked to, it's been a different set of circumstances.' Stateline reporter Anna Claire Vollers can be reached at avollers@ SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
31 minutes ago
- Yahoo
Cuts to Medicaid for Ohioans with disabilities could take away home care and job help
(iStock / Getty Images Plus) As the Ohio Senate moves forward with its budget proposal, advocates for Medicaid are hoping changes can be made to avoid significant impacts to low income residents, elderly Ohioans, and people with disabilities. Funding from Medicaid allows 3 million Ohioans access to health care services, including more than 770,000 who receive them through the Medicaid expansion program instituted in 2014. That expansion program allows people who weren't eligible for the traditional Medicaid programs but were still in categories of need to access health care. The existence of that program dropped the uninsured rate in Ohio to historic levels, according to the Health Policy Institute of Ohio. Along with health care, Medicaid dollars help with services that aren't necessarily connected to medical treatment, like home care, employment help, transportation, and a direct care provider who helps with all of those things. 'In many cases, if there wasn't Medicaid dollars behind it, I know of many people whose ability to live outside of a hospital or in the community would be threatened,' said Jules Patalita, a disability rights advocate for Sylvania-based The Ability Center. So advocates were disappointed to see the Ohio Senate maintain a provision from both the Ohio House's and Gov. Mike DeWine's budget proposals that would eliminate the Medicaid expansion group if the federal government reduces their level of support (currently at 90%) by even 1%. 'This would be a substantial loss for many working Ohioans,' said Kathryn Poe, researcher for the think tank Policy Matters Ohio. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Also included in the Senate's budget proposal is the elimination of a Medicaid waiver that 'would have provided continuous coverage for kids up to age 3,' Poe said, and a separate section of the budget that would 'allow the state to pause, eliminate or change other funds related to all other federal grants, should Congress adjust or eliminate funding for that program.' Poe did praise the Senate proposal for removing a House-submitted provision limiting Medicaid reimbursement for doulas to only six Ohio counties. 'This will ensure that Ohio parents continue to have access to culturally appropriate birthing resources and management,' Poe said. Concerns about loss of access don't just extend to physical health concerns or daily home services, but also to behavioral health services, on which 47% of Ohio adults on Medicaid rely, according to Kerstin Sjoberg, president and CEO of Disability Rights Ohio. 'If you don't have access to some sort of insurance like Medicaid, it's going to be almost impossible to get those services,' Sjoberg said. The state-level discussions come as federal budget reconciliation also touches on Medicaid funding as the Trump administration and Republicans in Congress attempt to slash federal spending by $880 billion over the next decade, particularly from public assistance programs like the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. U.S. House Speaker Mike Johnson and other leaders have talked about 'abuse' or 'fraud' as sources of revenue loss for the country in public programs, something those who engage with users of programs like Medicaid push back on. 'In reality, Medicaid is one of the most cost-effective and widely used safety nets in the country,' said the advocacy group Innovation Ohio in a call-to-action email over the congressional budget proposals. 'If this bill becomes law, the result will be fewer people with health care, more families pushed into poverty and deeper inequality. Rural hospitals could shut down.' According to a study by the Commonwealth Fund, Ohio could be one of the hardest hit economies if Medicaid cuts at the federal level come to fruition, cuts that could mean 29% more Medicaid spending by states or cuts to other programs, like education, to offset the Medicaid losses. One thing that will have to be addressed whether or not the cuts are realized in the state and federal budgets is the workforce that helps those who use Medicaid for home care and other services. Patalita said the word 'crisis' has been used in talking about the shortage of direct care providers, similar to the shortage of child care workers needed to provide adequate access to that service. 'We've talked to people who have had to wait weeks to be able to receive services in the home, because there just aren't enough providers out there,' Patalita said. The Ability Center did a study after the previous state budget increased the reimbursement rate for direct care providers under the state Medicaid program. That study showed that while reimbursements rates and, for that matter, provider wages should go up, the solution to the shortage problem wouldn't come with just one answer. 'The direct care crisis is too complex of an issue for a single action to remedy,' The Ability Center found. The study identified three 'major elements' of the shortage: high turnover rates, low hourly wages (lower than 'many entry level positions in retail and food service,' according to the study), and a lack of consistency in benefits. 'This failure by agencies to provide benefits adds to the worker shortage and forces those requiring home care to carry the burden of decreased access to care, especially those in rural areas,' the study found. Eliminating Medicaid funding, including the expansion group, will make life harder for those Ohioans who need the services, Sjoberg said, 'but it will also make it necessary that the direct care workforce is supported in other ways.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
Axios
37 minutes ago
- Axios
Scoop: Bessent to take victory lap on tax revenue
Treasury Secretary Scott Bessent will tell House lawmakers this morning that the cost-cutting and layoffs at the Internal Revenue Service didn't lead to an expected decline in revenue, with April's and May's tax receipts coming in higher than last year. Why it matters: More tax revenue gives the Treasury Department more time before it runs out of money and hits the debt limit. That could effectively relieve pressure on Congress to pass Trump's "one big beautiful bill" before the July 4th recess. What they're saying:"April receipts this year were up 9.5% over the previous year. And receipts in May were up 14.7% over the previous year," Bessent will tell the House Ways and Means Committee this morning. "I am pleased to report that Treasury has just completed its most successful tax filing season in years—and we did so while improving efficiencies and cutting costs at the IRS," he will say, according to excerpts obtained by Axios. "Critics of the President's efforts to modernize the IRS warned that the effort would result in a 10% shortfall in receipts," Bessent will say. "Instead, the opposite happened." The big picture: The so-called X-date, when the Treasury Department runs out of money and extraordinary measures to fund the government, is one of the driving forces behind Congress's urgency to pass Trump's budget bill before the July 4th recess. At the White House last week, Majority Leader John Thune called it a "no fail" situation as he works to find 51 votes for the House-passed bill. Zoom in: In early May, Bessent warned Speaker Mike Johnson that the X-date could hit in mid-July and that he should raise the debt ceiling before then.
