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A CONCURRENT RESOLUTION directing the Legislative Research Commission 1
to conduct a feasibility study for an Accountable Communities for Heal th Medicaid 2
delivery model pilot project. 3
WHEREAS, Kentucky persistently ranks among the worst states nationally for key 4
health indicators, including chronic disease prevalence, maternal health outcomes, 5
tobacco use, and preventable hospitalizations; and 6
WHEREAS, many Kentuckians are living with three or more chronic health 7
conditions, including asthma, kidney disease, heart disease, cancer, and diabetes; and 8
WHEREAS, Kentucky's health issues are deeply tied to the social and economic 9
conditions of rural communities, which remain inadequately and insufficiently addressed; 10
and 11
WHEREAS, Kentucky has operated its Medicaid program primarily under a 12
managed care delivery model since 2010; and 13
WHEREAS, the current Medicaid delivery model employed in the Commonweal th 14
has failed to produce valuable outcomes as Medicaid expenditures have continued to 15
increase while health outcomes have deteriorated and disparities have widened; and 16
WHEREAS, the transition from a fee -for-service Medicaid program to a managed 17
care model was chiefly motivated by a belief that contracting with Medicaid managed 18
care organizations to administer large portions of the Medicaid program would result in 19
budget stability and predictability; and 20
WHEREAS, despite the transition to managed care under former Governor Steve 21
Beshear, since 2010 the cost of the Kentucky Medicaid program has skyrocketed, 22
increasing from approximately $5,900,000,000 a year in 2010 to a projected amount of 23
over $20,600,000,000 a year in 2026; and 24
WHEREAS, since 2010, the number of Kentuckians enrolled in the Medicaid 25
program has risen from roughly 920,000 to approximately 1,400,000 in 2025, an increase 26
of roughly 50 percent resulting largely from former Governor Steve Beshear's decision to 27
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expand Medicaid eligibility under the Affordable Care Act in 2014; and 1
WHEREAS, expanded Medicaid eligibility and the resulting 50 percent increase in 2
enrollment fails to explain the nearly 400 percent increase in the cost of the program over 3
the same period of time; and 4
WHEREAS, the historic trend of rapid cost increases in the Medicaid program has 5
not resulted in enhanced reimbursement rates for rural healthcare providers; and 6
WHEREAS, access to essential, comprehensive healthcare services in rural 7
communities continues to erode under the managed care delivery model, underscoring the 8
urgent need for targeted interventions to reverse this trend; and 9
WHEREAS, under federal law, Medicaid managed care organizations are required 10
to achieve a minimum medical loss ratio of at least 85 percent, which means that at least 11
85 cents of every dollar paid to a managed care organization by a state Medicaid program 12
must be spent on the delivery of healthcare services for Medicaid enrollees; and 13
WHEREAS, current contracts between t he Department for Medicaid Services and 14
the Commonwealth's five contracted Medicaid managed care organizations require 15
managed care organizations to achieve at least a 90 percent medical loss ratio; and 16
WHEREAS, federal and state established medical loss ratios for Medicaid managed 17
care organizations have the effect of limiting a managed care organization's profit from a 18
Medicaid managed care contract to no more than 10 percent of the total contract value; 19
and 20
WHEREAS, the five managed care organizations cu rrently under contract with the 21
Department for Medicaid Services to administer Medicaid benefits in Kentucky are all 22
either publicly traded, for -profit corporations or owned by a publicly traded, for -profit 23
corporations; and 24
WHEREAS, publicly traded, for -profit corporations have a legally binding 25
fiduciary duty to their shareholders to increase profits quarter over quarter and year over 26
year; and 27
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WHEREAS, existing medical loss ratio requirements effectively mean that the only 1
way a contracted Medicaid manag ed care organization can fulfill its fiduciary duty to 2
shareholders to increase profits is to see an increase in the overall cost of the Medicaid 3
program, typically by increasing the per member per month capitation payments made by 4
the state to the managed care organizations; and 5
WHEREAS, Kentucky's current health data landscape is fragmented and lacks a 6
unified, inclusive dataset spanning the full continuum of care, limiting its effectiveness in 7
guiding informed health policy and appropriations; and 8
WHEREAS, Kentucky's healthcare system remains fragmented, with hospitals, 9
clinics, schools, social service organizations, and managed care organizations often 10
operating in silos, which has resulted in reactive care that seeks to treat symptoms rather 11
than coordinated strategies that tackle root causes of illness; and 12
WHEREAS, Kentucky must identify proven strategies to unite healthcare 13
providers, coordinate care, and connect communities while holding the entire system 14
accountable for both outcomes and costs; and 15
WHEREAS, the current cost of the Kentucky Medicaid program, paired with the 16
historical trend of rapid cost increases, is unsustainable and represents a catastrophic 17
threat to the stability and solvency of the Commonwealth's entire biennial budget; and 18
WHEREAS, given the current Medicaid landscape in Kentucky, as described 19
above, the Commonwealth must endeavor to identify a less costly and more sustainable 20
alternative to the current managed care delivery model; and 21
WHEREAS, transformative healthcare delivery models are reshaping access to care 22
and improving health outcomes across the United States; and 23
WHEREAS, an increasing number of states are seeing positive results, including 24
reduced costs and significant improvements in healthcare outcomes, by transition ing 25
away from managed care toward an accountable care delivery model; and 26
WHEREAS, accountable care organizations (ACO) prioritize whole -person care, 27
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adopt value -based payment models over volume -driven approaches, and incorporate 1
mechanisms for shared savings and financial risk; and 2
WHEREAS, accountable communities for health (ACH) aim to improve population 3
health by fostering regional collaboration, investing in community -based supports, and 4
advancing policies that promote and sustain healthier communities; and 5
WHEREAS, ACO and ACH models represent more strategic, provider -endorsed, 6
community-led models that enhance health outcomes while driving cost efficiencies; and 7
WHEREAS, ACO and ACH models are proven Medicaid delivery models currently 8
producing positive outcomes for state Medicaid programs across the United States and 9
have demonstrated that smarter investments in prevention and access to care can reduce 10
the costs of a state's Medicaid program while improving healthcare outcomes; and 11
WHEREAS, by impleme nting a comprehensive community -driven alternative 12
healthcare delivery model that integrates physical, behavioral, and spiritual care while 13
addressing the social conditions in which people live, work, play, and learn, the 14
Commonwealth could realize a 20 pe rcent improvement in both patient and provider 15
satisfaction and significant, measurable gains in overall population health by 2030; and 16
WHEREAS, Kentucky's area development districts have an established track record 17
for delivering community -based Medicaid services tailored to the needs of specific 18
geographic regions; and 19
WHEREAS, Kentucky's area development districts serve a large enough population 20
to effectively evaluate and benchmark the impact of an ACH delivery model on 21
improving outcomes and reducing costs; 22
NOW, THEREFORE, 23
Be it resolved by the Senate of the General Assembly of the Commonwealth of 24
Kentucky, the House of Representatives concurring therein: 25
Section 1. The Legislative Research Commission is hereby directed to conduct 26
a feasibility study for an Accountable Communities for Health Medicaid delivery model 27
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pilot project. The feasibility study shall assess, consider, and make recommendations 1
concerning the following: 2
(1) Examples of state Medicaid programs that have implemented an accountable 3
care Medicaid delivery model, including but not limited to accountable care 4
organizations, accountable communities for health, and accountable health community 5
models, to identify best practices and potential governance structure suitable for 6
Kentucky; 7
(2) Opportunities, barriers, and organizational capacity for implementing an 8
Accountable Communities for Health Medicaid delivery model pilot project under the 9
Kentucky Medicaid program; 10
(3) Potential geographic regions and partners suitable for an Accountable 11
Communities for Health Medicaid delivery model pilot project, including specific 12
assessment of the Lincoln Trail Area Development District, Barren River Area 13
Development District, and Green River Area Development District as an appropriate 14
geographic region for the pilot project; 15
(4) Existing health information exchange, data -sharing capacity, and 16
interoperability of various data systems, including eligibility data, across Medicaid, 17
providers, and social service systems to identify any necessary infrastruc ture 18
developments for a successful Accountable Communities for Health Medicaid delivery 19
model pilot project; 20
(5) Options for financing an Accountable Communities for Health Medicaid 21
delivery model pilot project, including anticipated costs, potential cost savings, 22
sustainability, and funding sources with specific emphasis on identifying options for 23
diverting current per member, per month capitation payments made to managed care 24
organizations to the pilot project; 25
(6) Creation of a nonprofit mutual insurance company as an alternative to for -26
profit insurance companies and Medicaid managed care organizations for administering 27
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an Accountable Communities for Health Medicaid delivery model pilot project, including 1
claims processing and provider payments; 2
(7) Potential pilot models, policy changes, and implementation pathways, 3
including necessary next steps to design and implement an Accountable Communities for 4
Health Medicaid delivery model pilot project; 5
(8) Strategies and metrics for evaluating the success of a f uture Accountable 6
Communities for Health Medicaid delivery model pilot project, including key metrics and 7
outcomes to be reported, monitored, and evaluated; and 8
(9) Any other issues or aspects of a feasibility study or an Accountable 9
Communities for Health Medicaid delivery model pilot project determined to be 10
necessary or appropriate by the Legislative Research Commission. 11
Section 2. The results of the feasibility study required under Section 1 of this 12
Resolution shall b e submitted to the Legislative Research Commission by November 1, 13
2026, for referral to the Interim Joint Committee on Health Services, the Interim Joint 14
Committee on Appropriations and Revenue, and the Medicaid Oversight and Advisory 15
Board. 16
Section 3. A pilot project resulting from the feasibility study required under 17
Section 1 of this Resolution shall be known as the 20 by 30 Accountable Care Pilot 18
Project. 19
Section 4. Provisions of th is Resolution to the contrary notwithstanding, the 20
Legislative Research Commission shall have the authority to alternatively assign the 21
issues identified herein to an interim join committee or subcommittee thereof, and to 22
designate a study completion date. 23