Kentucky (Kentucky) enacted a state surprise billing framework effective January 1, 2019, through amendments to KRS 304.17A-500 to 304.17A-590.

This law predates the federal No Surprises Act (NSA), which took effect for plan years beginning on or after January 1, 2022.

Importantly, CMS classifies Kentucky as a “Federal IDR Process” state, not bifurcated—meaning Kentucky’s law protects consumers but is not treated as a “specified state law” (SSL) for NSA payment/IDR purposes.

Kentucky’s 2019 law focuses on keeping patients held harmless and forcing payment disputes into the provider–planspace.

Key features (for state-regulated health benefit plans):

• Nonemergency services at in-network facilities
  
  • Health benefit plans must cover certain nonemergency services provided by a nonparticipating provider at an in-network facility at the in-network rate.
  • Nonparticipating providers are prohibited from collecting additional payment from the covered person beyond in-network cost-sharing.
• Emergency services at in-network facilities
  
  • Nonparticipating providers furnishing emergency services at an in-network facility must accept the in-network reimbursement rate as payment in full (plus the member’s in-network cost-share only).
  • Balance billing beyond in-network cost-sharing is prohibited.
• Provider contracting rules
  
  • Insurers must structure contracts with providers at in-network facilities so those providers accept the in-network rate as full payment and do not balance bill the covered person beyond their in-network cost-sharing.

Practically, for fully insured Kentucky plans, this creates a state-level hold-harmless framework for many facility-based OON encounters even before the NSA.

Despite having a surprise-billing statute, Kentucky does not operate a state IDR/arbitration system that CMS recognizes as a Specified State Law for determining the out-of-network rate under the NSA.

As a result:

• For NSA-eligible claims, Federal NSA IDR is the mechanism to resolve payment disputes between providers and plans.
• Kentucky’s law governs patient protections and some reimbursement rules, but does not replace the federal IDR process for determining final OON rates.

Federal IDR applies to:

• Emergency OON services
• Non-emergency OON services at in-network facilities (where NSA protections apply)
• OON air ambulance services

For NSA-covered disputes in Kentucky, the federal 30-day negotiation period applies:

• Starts when the provider receives the plan’s initial payment or denial.
• Parties must attempt to resolve the reimbursement dispute during this period.
• If unresolved, either side may escalate to Federal IDR.

Kentucky’s statute does not add a separate, competing negotiation or IDR timeline for these NSA-protected services.

Because Kentucky is in the “Federal IDR Process” column, arbitrators use the federal criteria, including:

• Qualified Payment Amount (QPA) – primary benchmark
• Provider training, experience, and patient acuity
• Contracting history and prior in-network rates (last 4 years)
• Market share of both provider and plan
• Complexity of the case and facility characteristics
• Evidence of good-faith contracting efforts

Kentucky law does not introduce alternative arbitration standards that supersede these factors for NSA cases.

Kentucky’s surprise billing protections are primarily rooted in:

• KRS 304.17A-500 to 304.17A-590, as amended by SB 235 / SB 236-type legislation, which:
  
  • Define “facility” and “in-network facility”
  • Require coverage of certain nonemergency OON services at in-network facilities at in-network rates
  • Prohibit balance billing beyond in-network cost-sharing
  • Require nonparticipating providers at in-network facilities to accept in-network rates as payment in full for certain emergency services
• Kentucky Department of Insurance (KDOI) consumer bulletins and guidance explaining how the federal NSA protections layer on top of these state rules as of January 1, 2022.

CMS’s IDR applicability chart lists Kentucky under “Federal IDR Process,” not “Bifurcated Process.”

• Kentucky’s 2019 statute is not treated as a Specified State Law (SSL) for purposes of setting the OON rate in NSA disputes.
• For fully insured, individual, and group plans, NSA governs how the OON rate is ultimately determined and federal IDR is used to resolve disputes.
• For self-funded ERISA plans, NSA + federal IDR also apply by default (no state opt-in SSL here).

• Kentucky’s law:
  
  • Prevents balance billing in defined scenarios
  • Forces coverage at in-network benefit levels for certain nonemergency and emergency services at in-network facilities
• Federal NSA:
  
  • Governs OON rate calculation (QPA-based)
  • Provides the binding IDR process when negotiation fails

Kentucky is therefore a “NSA + State Consumer Protections” state, but not bifurcated for payment/IDR.