Kentucky House approves broad Medicaid reform bill after floor fights over co-pays, data and transport

Frankfort, Ky. — The Kentucky House of Representatives passed House Bill 2 on Feb. 27, a multi-part Medicaid reform package the bill sponsor described as necessary to rein in program inefficiencies and align state practice with recent federal changes referenced in the debate as HR 1.

Representative from Jefferson 48, the bill sponsor, said the measure aims to strengthen procurement standards for Medicaid managed care organizations (MCOs), tighten audit and appeals procedures, require greater transparency and create a public dashboard tracking program performance. “Our Medicaid program provides health care coverage to one-third of Kentuckians and is the second largest state expense,” he said, urging colleagues to act on program integrity and oversight. He told the House the bill would limit audits to claims no older than two years and prevent MCOs from recouping funds until appeal processes are complete.

The bill drew sustained floor debate over cost-sharing and access. Representative from Fayette 45 argued the measure’s state-specific co-payments could put new financial burdens on low-income Kentuckians and chronic-care patients, warning that “by trying to collect a few dollars at the front door, we are effectively choosing to pay thousands of dollars out the back door in emergency costs.” The sponsor defended the cost-sharing as targeted to discourage inappropriate emergency-room use and promote accountability, noting an $8 co-pay for nonemergency ER visits and a planned $20 co-pay that would take effect in 2028 under the bill.

Several floor amendments were offered. Representative from Fayette 45’s House Floor Amendment 1 would have removed rigid state-mandated co-payments and required any cost sharing to meet only the federal minimum; it also sought to prohibit aggressive medical-debt reporting to credit agencies. The amendment was debated and failed on a roll call. A separate amendment (House Floor Amendment 18) from Representative from Knox that phased in a 90% rule over four years was accepted by the sponsor and adopted.

Members also debated provider protections and MCO oversight. Representative from Kenton 64 highlighted provisions intended to limit excessive audits, saying some providers have faced indefinite delays and large recoupments — including an $88,000 recoupment cited during debate. She described language that would require timely audit completion (within 180 days), allow providers 30 days to fix clerical errors before recoupment, and mandate annual MCO reports on appeals, grievances and claims with dollar values.

Transport, privacy and attestation were also contested. Representative from Jefferson 38 proposed an amendment to ensure transportation brokers screen for accommodations and allow federally qualified health centers and community behavioral-health providers to offer transport; the amendment failed. Representative from Jefferson 43 pushed for an amendment requiring that medical data transferred from the cabinet to the legislature be de-identified; supporters cited HIPAA and privacy concerns, but the amendment failed. Representative from Jefferson 34 sought to preserve federal-style audible self-attestation for people arriving at emergency departments without ID; that amendment also failed after debate.

Throughout debate, lawmakers warned of unintended consequences. Multiple members said the bill risked creating administrative barriers that would drive vulnerable Kentuckians from routine care into costlier emergency care, strain rural hospitals and worsen outcomes. Supporters contended the bill targets fraud and mismanagement and would improve transparency and long-term program sustainability.

Votes at a glance - House Committee Substitute 1: adopted (voice vote during explanation). - House Floor Amendment 18 (phase-in of 90% rule): adopted (voice vote). - House Floor Amendment 1 (strip state-mandated co-pays / medical-debt protections): failed (roll call; recorded in the House roll). - House Floor Amendment 4 (data tracking requirements): failed (roll call). - House Floor Amendment 7 (transportation safeguards / provider eligibility for transport): failed (roll call). - House Floor Amendment 6 (preserve audible self-attestation for emergency situations): failed (roll call). - House Floor Amendment 10 (de-identify data transferred to legislature): failed (roll call). - House Floor Amendment 16 (hardship-waiver unemployment threshold adjustment): failed (roll call). - Final passage: House Bill 2 as amended (House Committee Substitute 1 and House Floor Amendment 18) was recorded as passed by the House.

What happens next The bill now moves to the Senate process. Sponsors and opponents both flagged items they expect the Senate to review — including co-pay levels, hardship-waiver thresholds and data/privacy safeguards. Representative from Jefferson 48 told the House he will continue work with the Senate and oversight boards to refine implementation and data collection.

Reporter's note: The House transcript shows multiple roll calls with recorded tallies for several amendments and the final passage; when roll-call counts were unclear in parts of the record, vote outcomes are presented above as recorded (adopted/failed) without inferring absent detail.