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Up to $1 billion available to aid Kentucky hospitals

FRANKFORT, Ky. — The Governor announced Kentucky hospitals will receive an additional $800 million to $1 billion annually to help advance the quality of care of Medicaid members and provide a stable base for hospitals that will extend beyond the financial challenges of the COVID-19 pandemic.

The Kentucky Cabinet for Health and Family Services (CHFS) received approval on Jan. 14 from the U.S. Centers for Medicare and Medicaid Services (CMS) on a new directed payment initiative that increases inpatient Medicaid payments for Kentucky hospitals. Pending Kentucky General Assembly legislative approval and federal approval of detailed plans, payments could begin in March.

With over one-third of Kentucky’s population enrolled in Medicaid, payments are critical to building a better Kentucky by assuring equal access to quality care in the commonwealth.

In order to receive these funds, hospitals will have to abide by higher quality standards that will be developed in collaboration with CHFS and the Kentucky Hospital Association (KHA).

If HB 183 passed, the Department for Medicaid Services (DMS), an agency of the cabinet, also could access an additional $50 million to $80 million in funding to support the Kentucky Medicaid program.

Funding is subject to continued federal approval and acknowledgment of this program in the state budget. Over 1.6 million Kentuckians currently are enrolled in Medicaid. There are 112 hospitals in Kentucky, excluding university-affiliated and state mental hospitals.