CHAPTER 130
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CHAPTER 130
( SB 209 )
AN ACT relating to health care.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Section 1. KRS 304.17A-164 is amended to read as follows:
(1) As used in this section:
(a) "Cost sharing" means the cost to an[ individual] insured under a health plan according to any coverage
limit, copayment, coinsurance, deductible, or other out-of-pocket expense requirements imposed by the
plan, which may be subject to annual limitations on cost sharing, including those imposed under 42
U.S.C. secs. 18022(c) and 300gg-6(b), in order for the insured[an individual] to receive a specific
health care service covered by the plan;
(b) "Generic alternative" means a drug that is designated to be therapeutically equivalent by the United
States Food and Drug Administration's Approved Drug Products with Therapeutic Equivalence
Evaluations, except that a drug shall not be considered a generic alternative until the drug is nationally
available;
(c) "Health plan":
1. Means a policy, contract, certificate, or agreement offered or issued by an insurer to provide,
deliver, arrange for, pay for, or reimburse any of the cost of health care services; and
2. Includes a health benefit plan[ as defined in KRS 304.17A-005];
(d) "Insured" means any individual who is enrolled in a health plan and on whose behalf the insurer is
obligated to pay for or provide health care services;
(e) "Insurer" includes:
1. An insurer offering a health plan providing coverage for pharmacy benefits; or
2. Any other administrator of pharmacy benefits under a health plan;
(f) "Person" means a natural person, corporation, mutual company, unincorporated association,
partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation,
unincorporated organization, government, or governmental subdivision or agency;
(g) "Pharmacy" includes:
1. A pharmacy, as defined in KRS Chapter 315;
2. A pharmacist, as defined in KRS Chapter 315; and[or]
3. Any employee of a pharmacy or pharmacist; and
(h) "Pharmacy benefit manager" has the same meaning as in KRS 304.17A-161.
(2) To the extent permitted under federal law and except as provided in subsection (4) of this section, an insurer
issuing or renewing a health plan on or after January 1, 2022, or a pharmacy benefit manager, shall not:
(a) Require an insured purchasing a prescription drug to pay a cost-sharing amount greater than the amount
the insured would pay for the drug if he or she were to purchase the drug without coverage;
(b) Exclude any cost-sharing amounts paid by an insured or on behalf of an insured by another person for a
prescription drug, including any amount paid under paragraph (a) of this subsection, when calculating
an insured's contribution to any applicable cost-sharing requirement. The requirements of this paragraph
shall not apply:
1. In the case of a prescription drug for which there is a generic alternative, unless the insured has
obtained access to the brand prescription drug through prior authorization, a step therapy
protocol, or the insurer's exceptions and appeals process; or ACTS OF THE GENERAL ASSEMBLY 2
2. To any fully insured health benefit plan or self-insured plan provided to any employee under
KRS 18A.225;
(c) Prohibit a pharmacy from discussing any information under subsection (3) of this section; or
(d) Impose a penalty on a pharmacy for complying with this section.
(3) A pharmacist shall have the right to provide an insured information regarding the applicable limitations on his
or her cost sharing[cost-sharing] pursuant to this section for a prescription drug.
(4) If the application of any requirement of subsection (2)(b) of this section would be the sole cause of a health
plan's failure to qualify as a Health Savings Account-qualified High Deductible Health Plan under 26
U.S.C. sec. 223, as amended, then the requirement shall not apply to that health plan until the minimum
deductible under 26 U.S.C. sec. 223, as amended, is satisfied[Subsection (2)(b) of this section shall not apply
to any fully insured health benefit plan or self-insured plan provided to an employee under KRS 18A.225].
Section 2. KRS 205.532 is amended to read as follows:
(1) As used in KRS 205.532 to 205.536:
(a) "Clean application" means:
1. For credentialing purposes, a credentialing application submitted by a provider to a credentialing
verification organization that:
a. Is complete and correct;
b. Does not lack any required substantiating documentation; and
c. Is consistent with the requirements for the National Committee for Quality Assurance
requirements; or
2. For enrollment purposes, an enrollment application submitted by a provider to the department
that:
a. Is complete and correct;
b. Does not lack any required substantiating documentation;
c. Complies with all provider screening requirements pursuant to 42 C.F.R. pt. 455; and
d. Is on behalf of a provider who does not have accounts receivable with the department;
(b) "Credentialing application date" means the date that a credentialing verification organization receives a
clean application from a provider;
(c) "Credentialing alliance" means a contractual agreement entered into by Medicaid managed care
organizations under which the managed care organizations agree to utilize a single credentialing
verification organization and an identical credentialing process for the purpose of ensuring the
timely and efficient credentialing of providers;
(d) "Credentialing verification organization" means an organization that gathers data and verifies the
credentials of providers in a manner consistent with federal and state laws and the requirements of the
National Committee for Quality Assurance;
(e)[(d)] "Department" means the Department for Medicaid Services;
(f)[(e)] "Medicaid managed care organization" or "managed care organization" means an entity with
which the department has contracted to serve as a managed care organization as defined in 42 C.F.R.
sec. 438.2;[ and]
(g)[(f)] "Provider" has the same meaning as in KRS 304.17A-700; and
(h) "Request for proposals" has the same meaning as in KRS 45A.070.
(2) [On and after January 1, 2019, ]Every contract entered into or renewed on or after the effective date of this
Act for the delivery of Medicaid services by a managed care organization shall:
(a) Be in compliance with KRS 205.522[,] and 205.532 to 205.536;[,] and[ 304.17A-515] CHAPTER 130
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(b) Require participation in a credentialing alliance recognized by the department pursuant to
subsection (4) of this section if such an alliance has been established or utilization of the
credentialing organization designated by the department pursuant to subsection (5) of this section.
(3) The department shall enroll a provider within sixty (60) calendar days of receipt of a clean provider
enrollment application. The date of enrollment shall be the date that the provider's clean application was
initially received by the department. The time limits established in this section shall be tolled or paused for
any delay caused by an external entity. Tolling events include but are not limited to the screening
requirements contained in 42 C.F.R. pt. 455 and searches of federal databases maintained by entities such
as the United States Centers for Medicare and Medicaid Services.
(4)[(3)] (a) The department shall formally recognize a credentialing alliance formed by managed care
organizations if[in the private sector that is]:
1. One hundred percent (100%) of the total number of managed care organizations have entered
into a contractual agreement to form the credentialing alliance prior to December 1, 2023[For
the purpose of promoting a centralized process for credentialing providers];
2. The credentialing verification organization contracted as part of the credentialing alliance is
accredited by the National Committee for Quality Assurance; and
3. The credentialing verification organization contracted as part of the credentialing
organization is owned by or affiliated with a statewide healthcare[health care provider] trade
association[ that has at least one (1) year of experience providing credentialing services to at
least one (1) Medicaid managed care organization in Kentucky].
(b) A credentialing alliance established pursuant to this section shall:
1. Implement a single credentialing application via a Web-based portal available to all providers
seeking to be credentialed for any Medicaid managed care organization that participates in the
credentialing alliance;
2. Perform primary source verification and credentialing committee review of each credentialing
application that results in a recommendation on the provider's credentialing within thirty (30)
days of receipt of a clean application;
3. Notify providers within five (5) business days of receipt of a credentialing application if the
application is incomplete;
4. Provide provider outreach and help desk services during common business hours to facilitate
provider applications and credentialing information;
5. Expeditiously communicate the credentialing recommendation and supporting credentialing
information electronically to the department and to each participating Medicaid managed care
organization with which the provider is seeking credentialing; and
6. Conduct reevaluation of provider documentation when required pursuant to state or federal law
or when necessary for the provider to maintain participation status with a Medicaid managed
care organization.
[(c) If on or before December 31, 2021, sixty percent (60%) or more, with any fraction of a percent rounded
down, of the total number of Medicaid managed care organizations have entered into contracts with a
credentialing alliance, the procurement provisions of this section shall be null and void and the
department shall discontinue any contracts for credentialing verification services so that each Medicaid
managed care organization shall bear its own costs for provider credentialing.]
(5) (a) If a credentialing alliance has not been established and recognized by the department pursuant to
subsection (4) of this section by December 31, 2023, the department shall, through a request for
proposals and in accordance with KRS Chapter 45A, designate a single credentialing verification
organization to verify the credentials of providers on behalf of all managed care organizations.
(b) If the department designates a single credentialing verification organization pursuant to this
subsection: ACTS OF THE GENERAL ASSEMBLY 4
1. The contract between the department and the credentialing verification organization shall be
submitted to the Government Contract Review Committee of the Legislative Research
Commission for comment and review;
2. The credentialing verification organization shall be reimbursed on a per provider
credentialing basis by the department with the reimbursement being offset or deducted equally
from each managed care organizations capitation payment;
3. The credentialing verification organization shall comply with paragraph (b) of subsection (4)
of this section; and
4. The department may promulgate administrative regulations in accordance with KRS Chapter
13A to ensure the timely and efficient credentialing of providers.
(6)[(d)] If a Medicaid managed care organization assumes responsibility and costs for their own provider
credentialing by entering into a credentialing alliance pursuant to this section[subsection], the timely
credentialing of providers shall be given significant weight as a factor in the scoring process when the
department evaluates the Medicaid managed care organization's response to requests for proposals for all
contract awards.
(7)[(4) (a) The department shall enroll a provider within sixty (60) calendar days of receipt of a clean provider
enrollment application. The date of enrollment shall be the date that the provider's clean application was
initially received by the department. The time limits established in this section shall be tolled or paused by a
delay caused by an external entity. Tolling events include but are not limited to the screening requirements
contained in 42 C.F.R. pt. 455 and searches of federal databases maintained by entities such as the United
States Centers for Medicare and Medicaid Services.
(b)] A Medicaid managed care organization shall:
(a)[1.] Determine whether it will contract with the provider within thirty (30) calendar days of receipt of
the verified credentialing information from a credentialing verification organization either
designated by the department or contracted by managed care organizations as part of a
credentialing alliance; and
(b)[2.] 1.[a.] Within ten (10) days of an executed contract, ensure that any internal processing systems
of the managed care organization have been updated to include:
a.[i.] The accepted provider contract; and
b.[ii.] The provider as a participating provider.
2.[b.] In the event that the loading and configuration of a contract with a provider will take
longer than ten (10) days, the managed care organization may take an additional fifteen
(15) days if it has notified the provider of the need for additional time.
(8)[(5)] (a) Nothing in this section requires a Medicaid managed care organization to contract with a
provider if the managed care organization and the provider do not agree on the terms and conditions for
participation.
(b) Nothing in this section shall prohibit a provider and a managed care organization from negotiating the
terms of a contract prior to the completion of the department's enrollment and screening process.
(9)[(6)] (a) For the purpose of reimbursement of claims, once a provider has met the terms and conditions
for credentialing and enrollment, the provider's credentialing application date shall be the date from
which the provider's claims become eligible for payment.
(b) A Medicaid managed care organization shall not require a provider to appeal or resubmit any clean
claim submitted during the time period between the provider's credentialing application date and the
completion of the credentialing process.
(c) Nothing in this section shall limit the department's authority to establish criteria that allow a provider's
claims to become eligible for payment in the event of lifesaving or life-preserving medical treatment,
such as, for an illustrative but not exclusive example, an organ transplant.
(10)[(7)] Nothing in this section shall prohibit a university hospital, as defined in KRS 205.639, from performing
the activities of a credentialing verification organization for its employed physicians, residents, and mid-level
practitioners where such activities are delineated in the hospital's contract with a Medicaid managed care CHAPTER 130
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organization. The provisions of subsections (3), (4), (8)[(5)], and (9)[(6)] of this section with regard to
payment and timely action on a credentialing application shall apply to a credentialing application that has
been verified through a university hospital pursuant to this subsection.
(11)[(8)] To promote seamless integration of licensure information, the relevant provider licensing boards in
Kentucky are encouraged to forward and provide licensure information electronically to the department and
any credentialing verification organization.
Section 3. In implementing the requirements of this Act, the state shall only regulate a pharmacy benefit
manager or an insurer to the extent permissible under applicable law.
Became law without Governor's signature March 29, 2023.