MedicaidCoverageMedium impact
Provider Letter: Substance Use Disorder Residential Treatment Guidance
Kentucky Medicaid·KY · Psychiatry·Provider Letter
Effective date
Nov 15, 2021
We identified it
Jun 20, 2026
Summary
Kentucky Medicaid has issued guidance for Substance Use Disorder (SUD) residential treatment billing, clarifying that length of stay should be based on medical necessity rather than fixed periods, with reassessments required weekly for most levels. The policy specifies that some services like E&M visits for physical exams and medication management are reimbursed separately from the daily per diem rate.
Action Required
Immediately: Billing teams at facilities providing SUD residential treatment must ensure documentation supports medical necessity for length of stay rather than fixed 30/60/90 day models. Update billing practices to separately bill E&M services for physical examinations, MAT medical components, and psychiatric medication management outside of the daily per diem. Ensure weekly reassessments are documented for all residential levels of care.