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Kentucky CHFS Medicaid · October 24, 2026 · Primary source

Public Notice regarding Long-Term Care (June 5, 2024)

Score 63PRIMARYregulatoryState MedicaidKY

Summary

Kentucky Medicaid issued a public notice under 42 CFR 447.205 announcing a major overhaul of long-term care reimbursement effective July 1, 2024. The Department is transitioning from the RUG III case-mix methodology to the Patient Driven Payment Model, rebasing standard price rate components using 2022 cost report data with rebasing to occur every four years thereafter. Additional changes include increasing the provider tax allowance from $9.64 to $41.43, eliminating bed reserve day reimbursement, and bundling ancillary services into the per diem rate rather than billing them separately. The estimated total fiscal impact is $382,870,000.

What this may mean

Kentucky SNFs and long-term care facilities face a comprehensive payment model change effective July 1, 2024, shifting from RUG III to PDPM for case-mix calculation and losing separate billing for ancillary services, which are now incorporated into the per diem rate. The provider tax allowance increases more than fourfold, and bed reserve day payments are eliminated, creating winners and losers across the SNF provider base depending on acuity mix and current ancillary billing volume. The $382.87 million fiscal impact marks this as a structurally significant Medicaid rate action for Kentucky LTC providers.

Informational only. Not legal, medical, financial, or other professional advice. Always consult a qualified professional familiar with your specific facts before relying on any item.

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