Kentucky Maintained Pandemic-Era Medicaid Treatment Waivers After Other States Restored Prior Authorization
Kentucky Gov. Andy Beshear lifted Medicaid prior authorization requirements for substance use disorder treatment in 2020 to increase access during COVID-19. While more than 40 other states restored these controls as the pandemic waned, Kentucky kept the relaxed standards through 2025. State Medicaid spending on behavioral health and addiction treatment reached $2.3 billion in 2024, with warnings from Medicaid insurers and the attorney general's office about fraud and subpar care. The largest treatment provider, Addiction Recovery Care, became the state's top Medicaid recipient during this period.
The case illustrates operational and financial risks when states suspend managed care oversight controls like prior authorization without commensurate fraud detection — Kentucky's approach led to record spending and fraud concerns that state Medicaid insurers flagged repeatedly.
Behavioral Health · Managed Care · Finance
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