KY HB689

Amends KRS 205.6412 to expand Medicaid state-directed payment programs that increase reimbursement rates for qualifying hospitals serving Medicaid enrollees in Kentucky

Qualifying hospitals eligible for enhanced add-on payments based on average commercial rates must meet criteria including: participation in hospital rate improvement program, Level II-IV trauma center designation, location in counties exceeding statewide median Medicaid enrollment, and agreement for clinical rotations with university-affiliated graduate medical education programs

Pediatric teaching hospitals qualify for enhanced payments only for services to patients 18 years of age or younger

Department for Medicaid Services must submit a preprint to CMS within 60 days of the Act's effective date seeking authorization for a January 1, 2026 effective date; if approved, hospitals with state-owned university-affiliated graduate medical education agreements become eligible for Medicare-equivalent rate payments for physician and professional services

Funding for the nonfederal share must come from sources separate from the existing hospital assessment under KRS 205.6406 and cannot use general fund dollars; retroactive payments to January 1, 2026 required if CMS approves the preprint with that effective date