FRANKFORT, Ky. (KT) – Kentucky hospitals that meet federal quality measures can receive up to $1.1 billion in increased payments for Medicaid services next year, said Gov. Andy Beshear on Wednesday.

The funding, available through a federally approved, state-directed payment model, helps deliver and expand quality health care to the state’s 1.6 million Medicaid members.

With over one-third of Kentucky’s population enrolled in Medicaid, the governor said the payments are critical to building a better Kentucky by ensuring equal access to care in the commonwealth.

“Health care is a basic human right, and our people deserve the best care possible,” Gov. Beshear said. “This year, our state has faced so much tragedy and heartbreak from the pandemic, tornadoes and other natural disasters, and we are thankful to our hospitals for continuing to provide quality health care to our Kentucky families in need.”

Cabinet for Health and Family Services Secretary Eric Friedlander said this is the second announcement of additional funding to Kentucky hospitals in 2021. In January, the governor announced that Kentucky hospitals would receive an additional $800 million to $1 billion annually, to help advance clinical quality care to Medicaid members and provide a stable base for hospitals financially stressed by the COVID-19 pandemic.

Kentucky Hospital Association President Nancy Galvagni noted, “On behalf of our members, KHA is thrilled the Centers for Medicare & Medicaid Services approved continuation of the Hospital Rate Improvement Program for calendar year 2022. The ongoing partnership between CHFS and Kentucky’s hospitals made this application successful.”

“Medicaid is the largest payer of health care services in our Commonwealth, and we must continue to think outside the box to bring this program further into the 21st century,” said Kentucky Medicaid Commissioner Lee. “This collaboration between Medicaid and KHA is an example of that type of innovative thinking, allowing us to reward our providers for delivering quality services to our members.”

The state-directed payment initiative will be in place for all of 2022 and would need to be renewed each year going forward.

Per Kentucky state law, university hospitals and state mental hospitals are excluded from this payment increase.