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Legislative committee defers Kentucky Medicaid child‑waiver rules after dispute over consumer‑directed services
Summary
The Administrative Regulation Review Subcommittee unanimously deferred two Department for Medicaid Services regulations (KR2720 and KR2725) after advocates said the rules exclude participant‑directed (consumer‑directed) service options required by KRS 205.5606; the agency asked for a month to resolve legal and technical questions.
The Administrative Regulation Review Subcommittee voted unanimously to defer consideration of two Department for Medicaid Services regulations implementing a new 1915(c) child waiver after stakeholders raised legal and operational objections.
Kentucky Protection & Advocacy attorney Lucy Heskins told the committee that the proposed waiver and accompanying regulation “does not allow for person directed services within that waiver and that is inconsistent with Kentucky law,” citing KRS 205.5606 and the state’s requirement that consumer‑directed options be available in home‑and‑community‑based waivers.
Department officials acknowledged the concern but said the statutory language is outdated and the state’s federal approvals for Medicaid waivers have evolved. “This program doesn't exist anymore,” a Department for Medicaid Services official said, describing the historical “Independence Plus/consumer‑directed” label as no longer recognized in the current HCBS waiver application process and asserting that federal approvals for the child waiver did not include participant‑directed services.
Dr. Leslie Hoffman, deputy commissioner at DMS, framed the issue as a delivery‑option question rather than a new service: “Participant‑directed services is a service delivery option. It's not a set of services in and of itself,” she said, noting the agency’s operational concerns about implementing a consumer‑directed option for a small, high‑acuity population and the system and budget changes that adding the option would require.
Committee members pressed both sides on the legal tension. Representative Marzian asked whether the apparent conflict with state law could be fixed as the regulation proceeds through subsequent committees. Lucy Heskins and others argued the statute’s language is mandatory and does not contain the exceptions DMS described.
After extended questioning and discussion of federal approval constraints and budget implications, DMS requested a deferral to consult with stakeholders and legal staff. The committee accepted that request and voted to defer both KR2720 and KR2725 to the next monthly meeting. The clerk recorded the motion’s passage as unanimous (five ayes).
Next steps: the Department for Medicaid Services will return with the two regulations at the committee’s next scheduled meeting; the committee set a tentative date of July 8 at 1 p.m. to revisit deferred items.
