Kentucky Medicaid Officials Plan Reimbursement Rate ‘Freeze’ In Face of $280M Shortfall

Due to a projected $280 million shortfall in Kentucky's Medicaid program, the state is planning to "freeze" reimbursements to hospitals and providers, the AP/Owensboro Messenger-Inquirer reports. Typically, the Medicaid program raises its rates on July 1 to cover inflation. According to Kathy Kustra, Gov. Paul Patton's (D) Medicaid adviser, the freeze would save the state about $20 million. In testimony before the state House Health and Welfare Committee, Kustra also said the administration is planning to cut $3.9 million in "incentive payments" to health clinics. Although the reimbursement freeze will affect many health facilities, primary care physicians, pharmacists, chiropractors and dentists will be exempt from the freeze because they do not receive automatic annual increases. The Messenger-Inquirer reports that the rate freeze is the second "major step" by the Patton administration to "rein in" Medicaid costs. Last month, Patton ordered a moratorium on applications for health care projects, such as equipment purchases or building expansions or constructions (Wolfe, AP/Owensboro Messenger-Inquirer, 6/21).