KY. Rev. Statutes-Chapter 304-Subtitle 17A-Health Benefit Plans

08/08/2026

Kentucky

Section 304.17A-605; 304.17A-606; and 304.17A-6061

Requirements and procedures for utilization review -- Exception for private review agent operating under contract with the federal government. (Effective until January 1, 2028); Requirements and procedures for utilization review -- Exception for private review agent operating under contract with the federal government. (Effective January 1, 2028). Definitions for section -- Prior authorization exemption program -- Program requirements and options. (Effective January 1, 2028). Commissioner to report to the Legislative Research Commission on prior authorization exemption program -- Contents of report. (Effective January 1, 2028).

Prior Authorization

304.17A-605. Requirements and procedures for utilization review -- Exception for private review agent operating under contract with the federal government. (Effective until January 1, 2028).

(1) KRS 304.17A-600, 304.17A-603, 304.17A-605, 304.17A-607, 304.17A-609, 304.17A-611, 304.17A-613, and 304.17A-615 set forth the requirements and procedures regarding utilization review and shall apply to:

(a) Any insurer or its private review agent that provides or performs utilization review in connection with a health benefit plan or a limited health service benefit plan; and

(b) Any private review agent that performs utilization review functions on behalf of any person providing or administering health benefit plans or limited health service benefit plans.

(2) Where an insurer or its agent provides or performs utilization review, and in all instances where internal appeals as set forth in KRS 304.17A-617 are involved, the insurer or its agent shall be responsible for:

(a) Monitoring all utilization reviews and internal appeals carried out by or on behalf of the insurer;

(b) Ensuring that all requirements of KRS 304.17A-600 to 304.17A-633 are met;

(c) Ensuring that all administrative regulations promulgated in accordance with KRS 304.17A-609, 304.17A-613, and 304.17A-629 are complied with; and

(d) Ensuring that appropriate personnel have operational responsibility for the performance of the insurer's utilization review plan.

(3) A private review agent that operates solely under contract with the federal government for utilization review or patients eligible for hospital services under Title XVIII of the Social Security Act shall not be subject to the registration requirements set forth in KRS 304.17A-607, 304.17A-609, and 304.17A-613.

Effective: July 15, 2002 History: Amended 2002 Ky. Acts ch. 105, sec. 1, effective July 15, 2002.

Created 2000 Ky. Acts ch. 262, sec. 3, effective July 14, 2000.

Section 304.17A-605. Requirements and procedures for utilization review -- Exception for private review agent operating under contract with the federal government. (Effective January 1, 2028).

(1) (a) Except as provided in paragraph (b) of this subsection, KRS 304.17A-600, 304.17A-603, 304.17A-605, 304.17A-607, 304.17A-609, 304.17A-611, 304.17A-613, and 304.17A-615 set forth the requirements and procedures regarding utilization review and shall apply to:

1. Any insurer or its private review agent that provides or performs utilization review in connection with a health benefit plan or a limited health service benefit plan; and

2. Any private review agent that performs utilization review functions on behalf of any person providing or administering health benefit plans or limited health service benefit plans.

(b) KRS 304.17A-606 sets forth additional requirements for prior authorization and shall apply to:

1. Any insurer or its private review agent that provides or performs utilization review in connection with a health benefit plan; and

2. Any private review agent that performs utilization review functions on behalf of any person providing and administering health benefit plans.

(a) Monitoring all utilization reviews and internal appeals carried out by or on behalf of the insurer;

(b) Ensuring that all requirements of KRS 304.17A-600 to 304.17A-633 are met;

(c) Ensuring that all administrative regulations promulgated in accordance with KRS 304.17A-609, 304.17A-613, and 304.17A-629 are complied with; and

(d) Ensuring that appropriate personnel have operational responsibility for the performance of the insurer's utilization review plan.

This version of Section 304.17A-605 was created by KY HB 176 / KY BR 119 (2026).

Effective: January 1, 2028

History: Amended 2026 Ky. Acts ch. 102, sec. 3, effective January 1, 2028. -- Amended 2002 Ky. Acts ch. 105, sec. 1, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 262, sec. 3, effective July 14, 2000.

Legislative Research Commission Note (1/1/2028). 2026 Ky. Acts ch. 102, sec. 7, provides that the amendments to this statute in that Act shall apply to contracts delivered, entered, renewed, extended, or amended on or after January 1, 2028.

See https://apps.legislature.ky.gov/law/statutes/

Section 304.17A-606.

(1) As used in this section:

(a) "Covered health care service" means a health care service furnished or proposed to be furnished to a covered person that is specifically available or included as a covered benefit in the covered person's health benefit plan;

(b) "Electronic health record" has the same meaning as in 42 U.S.C. sec. 17921, as amended;

(c) "Evaluation period" means a twelve (12) month period of time for which a health care provider's prior authorization experience is evaluated by an insurer or private review agent;

(d) "Health care provider" has the same meaning as in KRS 304.17A-005, except for purposes of this section the term includes, if practicing independently, any:

(1) Licensed clinical alcohol and drug counselor licensed under KRS Chapter 309;

(2) Licensed psychologist, licensed psychological practitioner, or certified psychologist with autonomous functioning licensed or certified under the provisions of KRS Chapter 319;

(3) Licensed professional clinical counselor licensed under KRS Chapter 335;

(4) Licensed marriage and family therapist licensed under KRS Chapter 335; Licensed professional art therapist licensed under KRS Chapter 309; and

(5) Licensed clinical social worker licensed under KRS Chapter 335.

(e) "Health care provider group" means two (2) or more health care providers that provide health care services within an entity that shares a common:

1. Group provider number; or

2. Tax identification number.

(f) "Health care service" has the same meaning as in KRS 304.17A-005, except for purposes of this section the term:

1. Includes procedures, treatments, and services rendered by a health care provider as defined in this section; and

2. Does not include the provision of prescription drugs;

(g) "Interoperability standards" means the technical standards set forth in 45 C.F.R. sec. 170.215, as amended;

(h) "Participating provider":

1. Means a health care provider that has entered into a participating provider contract; and

2. Includes a health care provider group if the insurer has elected to offer an exemption to the health care provider group under subsection (4)(b)2. of this section.

(i) "Participating provider contract" means a contract between a health care provider, either directly or through a health care provider group, and an insurer for the provision of health care services under a health benefit plan;

(j) "Utilization" means the number of claims submitted for a particular health care service under a health benefit plan by a participating provider; and

(k) "Value-based care agreement" means a contractual agreement between a health care provider, either directly or through a health care provider group, and an insurer that:

1. Incentivizes or rewards the provider based on one (1) or more of the following:

a. Quality of care;

b. Safety;

c. Patient outcomes;

d. Efficiency;

e. Cost reduction; or

f. Other factors; and

2. May, but is not required to, include shared financial risk and rewards based on performance metrics.

(2) An insurer or its private review agent shall not require a covered person, authorized person, or participating provider to obtain a prior authorization for a particular health care service under a health benefit plan if, at the time the health care service was provided, the provider had a prior authorization exemption for that particular health care service under a program offered under subsection (3) of this section.

(3) Every insurer shall offer a program under which a participating provider may qualify for an exemption from the requirement to obtain prior authorization for any covered health care service that requires prior authorization.

(4) The program offered under subsection (3) of this section:

(a) Shall:

1. Provide that a participating provider, for an evaluation period established by the insurer or private review agent, receive a prior authorization exemption for a particular health care service if, during the previous evaluation period, the provider met program terms and conditions established by the insurer or private review agent that are not in violation of this section;

2. Not condition a prior authorization exemption upon the provider exceeding a ninety-three percent (93%) approval rate for prior authorization requests submitted by the provider for that health care service during an evaluation period;

3. Require the insurer or its private review agent to evaluate, on an annual basis, whether a participating provider qualifies to receive a prior authorization exemption for each covered health care service for which the insurer requires prior authorization;

4. Require each annual evaluation required under subparagraph 3. of this paragraph to be conducted on:

a. For participating provider contracts that have a performance period of one (1) year, the contract's renewal date; or

b. For participating provider contracts that have a performance period of greater than one (1) year, the annual anniversary date of the contract renewal;

5. Require an insurer or its private review agent to notify each participating provider that qualifies for a prior authorization exemption within thirty (30) days after conducting the annual evaluation required under subparagraph 3. of this paragraph;

6. Require an insurer or its private review agent to make available to a health care provider during the contracting process the requirements that the provider must meet to participate in the program; and

7. Comply with any administrative regulation promulgated under KRS 304.2-110 for or as an aid to the effectuation of this section; and

(b) May:

1. Offer a prior authorization exemption for any prescription drug;

2. Offer a prior authorization exemption to a health care provider group in lieu of each participating provider practicing within a health care provider group;

3. Condition a participating provider's eligibility to participate in the program on the provider satisfying one (1) or more of the following:

a. The provider has entered into, either directly or through a health care provider group, a value-based care agreement with the insurer;

b. The provider has been a participating provider for a minimum period of time established by the insurer or private review agent, except an established minimum period of time shall not be more than one (1) year; or

i. Complies with interoperability standards; and

ii. Has entered into, either directly or through a health care provider group, an electronic health record access agreement with the insurer or private review agent;

4. Provide that a participating provider shall not qualify for a prior authorization exemption for any particular health care service unless the provider's utilization for that health care service during the previous evaluation period meets any utilization requirement established by the insurer or private review agent, except an established utilization requirement shall not:

a. Require a minimum utilization of more than twenty-four (24); or

b. Impose a maximum utilization of less than one hundred ten percent (110%) of the participating provider's utilization for that particular health care service during the previous evaluation period; and

5. Provide that an insurer or its private review agent may revoke a participating provider's prior authorization exemption for any particular health care service, or suspend or revoke a participating provider's participation in the program, if:

a. The insurer or private review agent has evidence that the provider has engaged in fraud or abuse; or

b. The provider's utilization meets or exceeds a maximum utilization imposed under subparagraph 4.b. of this paragraph.

(5) If an insurer or its private review agent determines that a participating provider is eligible to participate in the program offered under subsection (3) of this section, the insurer or private review agent shall send a notice to the provider that includes:

(a) A statement that the provider is eligible to participate in the program; and

(b) A list of each health care service that is subject to the elimination of prior authorization requirements under the program.

(6) For all forms and notices sent to a participating provider in accordance with this section, or any administrative regulations promulgated under KRS 304.2-110 for or as an aid to the effectuation of this section, the insurer or its private review agent shall:

(a) Provide a process for the provider to designate and update the provider's preferred manner for receiving the forms and notices; and

(b) Send the forms and notices to the provider in the manner designated under paragraph (a) of this subsection.

(7) This section shall not be construed to:

(a) Prevent an insurer or its private review agent from requesting a health care provider to provide additional information about a health care service rendered to a covered person; or

(b) Require coverage of a noncovered health care service under a covered person's health benefit plan.

Effective: January 1, 2028 History: Created 2026 Ky. Acts ch. 102, sec. 1, effective January 1, 2028.

Legislative Research Commission Note (1/1/2028). 2026 Ky. Acts ch. 102, sec. 7, provides that this statute shall apply to contracts delivered, entered, renewed, extended, or amended on or after January 1, 2028.

Made law in 2026 by the enactment of KY HB 176 / KY BR 119 (2026). See https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38715.

Section 304.17A-6061. Commissioner to report to the Legislative Research Commission on prior authorization exemption program -- Contents of report. (Effective January 1, 2028).

The commissioner shall:

(1)(a) Submit a written report not later than September 30 of each year to the Legislative Research Commission for referral to the Interim Joint Committees on Banking and Insurance and Health Services relating to prior authorization in the provision of health care benefits under this chapter.

(b) The report required under paragraph (a) of this subsection shall include:

1. Information relating to the implementation and effectuation of KRS 304.17A-606.

2. The number of insurers and private review agents offering a program required under KRS 304.17A-606;

3. The number of providers, by provider group, specialty, and county, participating in one (1) or more programs offered under KRS 304.17A606;

4. A list of health care services, which shall include a description and Current Procedural Terminology code for each service, for which exemptions have been granted under the programs required under KRS 304.17A-606;

5. The number of programs offered under KRS 304.17A-606, which shall include:

a. The number of programs that grant exemptions for one (1) or more prescription drugs; and

b. A list of the drugs for which exemptions are granted under a program reported under subdivision a. of this subparagraph; and

(6) With respect to any health insurance policy, certificate, plan, or contract required to comply with KRS 304.17A-600 to 304.17A-633:

a. A list of all services, procedures, and other treatments, including prescription drugs, that require prior authorization;

b. The percentage of prior authorization requests for nonurgent health care services in aggregate and by specific service, procedure, prescription drug, and other treatment:

i. That were approved without an extension;

ii. For which the review was extended and the request approved; and

iii. That were denied, which may include the reason or reasons for the denials;

c. The percentage of prior authorization requests for urgent health care services that were:

i. Approved; and

ii. Denied, which may include the reason or reasons for the denials; and

d. The average and median time between submission of a prior authorization request and the prior authorization decision for:

i. Nonurgent health care services; and

ii. Urgent health care services;

(2) Provide the Interim Joint Committees on Banking and Insurance and Health Services with a detailed briefing, upon request, to discuss and explain any report submitted under subsection (1) of this section; and

(3) Promulgate any administrative regulation, including an emergency administrative regulation, in accordance with KRS Chapter 13A that the commissioner deems necessary to implement this section.

Effective: January 1, 2028 History: Created 2026 Ky. Acts ch. 102, sec. 2, effective January 1, 2028.

Made law in 2026 by the enactment of KY HB 176 / KY BR 119 (2026). See https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38715.