Title 908 | Chapter 003 | Regulation 060REG
PROPOSED
This document is not yet current.
PREVIOUS VERSION
The previous document that this document is based upon is available.
CABINET FOR HEALTH AND FAMILY SERVICES
Department for Behavioral Health, Developmental and Intellectual Disabilities
Division of Behavioral Health
(Amendment)
908 KAR 3:060.''Means test'' for determining patient liability and per diem rates.
Section 1.
Definitions.(1)
"Allowed deduction" means an amount disregarded or deducted from income and assets for the purpose of determining the ability to pay for services rendered by a facility.(2)
"Available assets" means resources of the patient or person responsible for the patient in accordance with KRS 210.720(3), less the allowed deductions.(3)
"Deductible" means an amount that a patient or person responsible for the patient is expected to pay toward the patient's care by a third-party payor such as Medicare or a private insurance company.(4)
"Facility" is defined by(5)
"Income" means funds received by the patient or person responsible for the patient and includes the following:(a)
Salaries;(b)
Wages;(c)
Self-employed gross revenues, less operating expenses;(d)
Benefit payments, except for Supplemental Security Income payments;(e)
Social Security payments;(f)
Rents;(g)
Royalties;(h)
Pensions;(i)
Retirement payments;(j)
Veteran's Administration payments;(k)
Black lung benefits;(l)
Railroad retirement benefits;(m)
Gifts;(n)
Settlements;(o)
Trust receipts;(p)
Alimony, but does not include child support payments;(q)
Interest income; and(r)
Income from investments.(6)
"Patient" means a person admitted to a facility.(7)
"Person responsible for the patient" is defined by(8)
"Personal needs allowance(9)
"Poverty guidelinesSection 2.
Determination of the Ability to Pay for Services Rendered at Facilities.(1)
The facility shall apply the means test to each patient who is admitted to the facility for treatment.(2)
(a)
The means test shall include a determination of the responsible party or parties to pay for the patient's care, which shall be documented using the Patient or Responsible Party Financial Record form.(b)
This form shall be explained to the patient or person responsible for the patient and signed by all parties.(c)
If the patient or person responsible for the patient refuses to sign, this refusal shall be noted on the form along with the date the form was discussed.(d)
Refusal to sign the form shall not absolve the liability of the patient or person responsible for the patient to pay for services rendered.(3)
The amount a patient or person responsible for the patient is required to pay for services shall be the lesser of:(a)
The cost per patient day in accordance with Section 7 of this administrative regulation, less any amount paid by Medicare, Medicaid, and other third-party payment sources; or(b)
The amount the patient is able to pay calculated in accordance with this administrative regulation.(4)
The facility shall determine the financial resources available to the patient or person responsible for the patient, including:(a)
Insurance and third-party payors;(b)
Income received or expected to be received during the period of hospitalization; and(c)
Available assets.(5)
Allowed deductions shall be calculated as the patient and the number of the patient's dependents.(a)
A patient's legally-recognized spouse and each individual less than eighteen (18) years of age who is in the patient's care shall be classified as dependents for purposes of calculating the poverty guidelines.(b)
Allowed deductions for the patient plus the patient's dependents shall be as follows:1.
One (1) shall be $2,000;2.
Two (2) shall be $4,000; or3.
Three (3) or more shall be $4,000 plus fifty (50) dollars added for each additional member over the initial two (2).(6)
The following shall be allowed deductions from income:(a)
Federal income taxes;(b)
State income taxes;(c)
Social security taxes;(d)
Normal retirement contributions;(e)
Unpaid medical and dental bills;(f)
Health insurance premiums;(g)
Medicare Part B insurance premiums;(h)
Long-term care insurance premiums;(i)
A personal needs allowance of sixty (60)(j)
Student loan payments;(k)
Bed-hold reservation costs at another facility for up to fourteen (14) days as long as the patient's stay is expected to be shorter than the reservation period;(l)
Child support payments;(m)
Life insurance premiums if the patient's estate or a funeral home is the named beneficiary on the policy; and(n)
A basic maintenance allowance, derived from the current Poverty Guidelines, for the size of the patient's family, if the following conditions are met:1.
The patient was maintaining a residence immediately prior to admission;2.
The residence will continue to be maintained during the period of hospitalization and resources of the patient are needed for this effort; and3.
Facility staff expects the patient's hospital stay to be three (3) months or less in duration.(7)
An estimated income tax related deduction of twenty-five (25) percent of total income shall be allowed instead of the actual wage taxes contained in subsection (6) of this section. A patient or person responsible for the patient may request that actual tax amounts be used instead of the estimated deduction, if the person can substantiate the actual tax amounts.(8)
The following shall be excluded from the calculation of available assets:(a)
Prepaid burial plans of up to $1,500 per family member;(b)
Automobiles;(c)
Housing structures;(d)
Land;(e)
Retirement accounts;(f)
Pension funds; and(g)
Trust funds that cannot be accessed;(h)
The applicable allowed deduction; and(i)
Other assets that are exempted under state law, if any.Section 3.
Calculation of the Amount the Patient or Person Responsible for the Patient is Able to Pay.(1)
The facility shall calculate the ability to pay amount utilizing either the Ability to Pay Worksheet or the Deductible Ability to Pay Worksheet as appropriate and by using the following formula:(a)
Determine the total amount of income of the patient or person responsible for the patient;(b)
Determine the amount of allowed deductions from income in accordance with Section 2(5)(c)
Subtract the allowed deductions from income; and(d)
The remaining available income shall be divided by 365 to obtain the average daily income of the patient or person responsible for the patient.(2)
If the patient or person responsible for the patient has available assets, the facility shall:(a)
Determine the amount of available assets; and(b)
Include available assets that remain after the deduction in the patient or person responsible for the patient's ability to pay amount.(3)
Payments to be made on behalf of the patient by a third-party, such as Medicare, Medicaid, or private insurance companies, shall be subtracted from the facility's per diem rate as contained in Section 7 of this administrative regulation. Any remaining liability shall be satisfied as follows, with the exception of ability to pay amounts arising from deductibles:(a)
The available income of the patient or person responsible for the patient shall first be applied to the patient's liability for services;(b)
Any liability that remains after application of the average available income shall be satisfied by available assets; and(c)
The applicable average income per day and available asset amount per day shall be combined to determine the ability to pay amount. The ability to pay amount shall be charged for each day the patient is in the facility.(4)
Ability to pay liabilities arising from deductibles shall first be applied to available assets of the patient or person responsible for the patient with any remaining liability being satisfied with available income.(5)
If the Department for Medicaid Services performs an income assessment for a Medicaid patient residing in a nursing facility, intermediate care facility for an individual with an intellectual disability, or psychiatric hospital in accordance with 907 KAR 20:035, that Medicaid income assessment shall be relied upon instead of the ability to pay provisions established in this administrative regulation.(6)
(a)
After the ability to pay is determined for the patient or person responsible for the patient, a Patient or Responsible Party Financial Agreement and Assignment form shall be completed.(b)
This form shall be explained to the patient or person responsible for the patient and signed by all parties.(c)
If the patient or person responsible for the patient refuses to sign, this refusal shall be noted on the form including the date the form was discussed.(d)
Refusal to sign the form shall not absolve the liability of the patient or person responsible for the patient to pay for services rendered.(7)
The patient liability shall be calculated based on the United States Department of Health and Human Services poverty guidelines.Section 4.
Revisions to Ability to Pay Amounts.(1)
Facility staff shall update a patient's ability to pay amount to incorporate changes that take place subsequent to the initial determination. These changes may include:(a)
Income revisions;(b)
Asset revisions, including exhaustion of available assets;(c)
Change in allowed deductions;(d)
Change in a dependent of the patient or person responsible for the patient; or(e)
Change regarding the status of the person responsible for the patient.(2)
Upon a change to the ability to pay information, a revised Ability to Pay Worksheet or Deductible Ability to Pay Worksheet shall be prepared along with a revised Patient or Responsible Party Financial Record form and a revised Patient or Responsible Party Financial Agreement and Assignment form. The revised forms shall be presented to the patient or person responsible for the patient in the same manner as the original forms.Section 5.
Failure to Provide Financial Information or to Assign Benefits.(1)
If the patient or person responsible for the patient fails to or will not provide the information necessary to calculate the ability to pay amount, the maximum charge provided in Section 2(3)(a) of this administrative regulation shall be assessed.(2)
If the patient or person responsible for the patient fails to sign the assignment provision contained in the Patient or Responsible Party Financial Agreement and Assignment form, the maximum charge provided in Section 2(3)(a) of this administrative regulation shall be assessed.Section 6.
Payment Hardship, Appeal and Waiver Procedures.(1)
Payment hardships.(a)
If the patient or person responsible for the patient believes that payment of the ability to pay amount results in a financial hardship, the patient or person responsible for the patient may request to make installment payments.(b)
This request shall be made in writing to the facility's patient billing supervisor and shall include documentation to support the claimed hardship.(c)
The patient billing supervisor shall review the financial hardship request and render a payment plan decision within fifteen (15) days from the receipt of the hardship request. If there is financial hardship, the patient billing supervisor shall allow minimum monthly payments based on what the patient can reasonably afford.(2)
Appeals.(a)
If the patient or person responsible for the patient is aggrieved by the facility charges or a payment plan determined in accordance with this administrative regulation, that person may appeal the determination to the facility director or the facility director's designee for informal resolution within thirty (30) days of the ability to pay amount or payment plan being calculated.(b)
The facility director or the facility director's designee shall review the appeal and issue a determination within thirty (30) days of receipt.(c)
If the patient or person responsible for the patient is dissatisfied with the informal resolution, that person may file an appeal within thirty (30) days of the facility's response to the Director of the Division of Administration and Financial Management, Department for Behavioral Health, Developmental and Intellectual Disabilities, 275 E Main Street, Frankfort, Kentucky 40621. The director shall arrange for an administrative hearing in accordance with KRS Chapter 13B.(d)
The appeal request shall fully explain the patient's, or person responsible for the patient's, position and shall include all relevant documentation supporting the claim of financial hardship.(3)
Waivers.(a)
The director of each facility may waive payment of the facility's charges under this administrative regulation if waiver is in the best interest of all parties, based on the factors provided in paragraph (c) of this subsection.(b)
The Director of the Division of Administration and Financial Management shall have the authority to waive payment at any facility within the department if waiver is in the best interest of all parties, based on the factors provided in paragraph (c) of this subsection.(c)
When making a waiver determination, the following factors shall be considered:1.
Income;2.
Overall family debt;3.
Assets; and4.
Other information relating to the current financial situation of the patient or the person responsible for the patient.Section 7.
Per Diem Rates and separate charges.(1)
Facilities owned by the state shall charge:(a)
A(2)
(b)
A separate charge for treatment services as indicated in subsection (3) and (4) of this section.(2)
Current per diem rates shall be posted on the department's website and at each facility.(3)
A separate charge shall be imposed if the following treatment services are provided at a Department for Behavioral Health, Developmental and Intellectual Disabilities facility:(a)
Physician's services;(b)
EEG;(c)
EKG;(d)
Occupational therapy;(e)
Physical therapy;(f)
X-ray;(g)
Laboratory;(h)
Speech therapy;(i)
Hearing therapy;(j)
Psychology;(k)
Pharmacy;(l)
Respiratory therapy;(m)
Anesthesia;(n)
Electroshock therapy;(o)
Physician assistant;(p)
Advanced practice registered nurse; and(q)
Outpatient clinic services.(4)
In accordance with KRS 210.040(4), if a patient needs or requires care, treatment, or service from an outside medical provider, eligible costs shall be paid by the facility and a separate charge for the outside medical expense may be billed to the patient.Section 8.
Section 9.
Incorporation by Reference.(1)
The following material is incorporated by reference:(a)
"DBHDID 3:060-1 Ability to Pay Worksheet", November 2016;(b)
"DBHDID 3:060-2 Deductible Ability to Pay Worksheet", November 2016;(c)
"DBHDID 3:060-3 Patient or Responsible Party Financial Agreement and Assignment", November 2016;(d)
"DBHDID 3:060-4 Patient or Responsible Party Financial Record", July 2026(e)
"Kentucky Facility Per Diem Rate Form", November 2016.(2)
This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Behavioral Health, Developmental and Intellectual Disabilities, 275 East Main Street, Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m. Eastern Time/7 a.m. through 3:30 p.m. Central Time. This material may also be viewed on the department's web site at https://dbhdid.ky.gov/dpi908 KAR 3:060
KATHERINE R. MARKS, Ph. D., Commissioner
STEVEN J. STACK, MD, MBA, Secretary
APPROVED BY AGENCY: September 28, 2026
FILED WITH LRC: October 14, 2026 at 2:00 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall, if requested, be held on December 21, 2026, at 9:00 a.m. using the CHFS Office of Legislative and Regulatory Affairs Zoom meeting room. The Zoom invitation will be emailed to each requestor the week prior to the scheduled hearing. Individuals interested in attending this virtual hearing shall notify this agency in writing by December 14, 2026 five (5) workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who attends virtually will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on this proposed administrative regulation through December 31, 2026. Send written notification of intent to attend the public hearing or written comments on the proposed administrative regulation to the contact person. Pursuant to KRS 13A.280(8), copies of the statement of consideration and, if applicable, the amended after comments version of the administrative regulation shall be made available upon request.
CONTACT PERSON: Krista Quarles, Policy Analyst, Office of Legislative and Regulatory Affairs, 275 East Main Street 5 W-A, Frankfort, Kentucky 40621; Phone: 502-564-7476; Fax: 502-564-7091; CHFSregs@ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Jessica Beaubien, Krista Quarles; Phone Number: (502) 564-4527, (502) 564-7476; Email: jessical.beaubien@ky.gov, CHFSregs@ky.gov
Subject Headings:
Behavioral Health, Mental Health, Occupations and Professions, Substance Use
(1) Provide a brief summary of:
(a) What this administrative regulation does:
KRS 210.720(3) requires the secretary to adopt a "Means test" for determining the ability to pay of the patient or person responsible for the patient for board, maintenance, and treatment at a facility owned by the state. This administrative regulation establishes the "Means test" for making that determination and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities.
(b) The necessity of this administrative regulation:
This administrative regulation is necessary to establish the "Means test" for making that determination and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
This administrative regulation conforms to the authorizing statutes through fulfilling the requirements in KRS 210.720(2), 210.720(3), and 210.750.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
This administrative regulation assists the effective administration of the statutes by establishing the "Means test" for making a determination of a patient’s ability to pay and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities. (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
This amendment adds provisions from SB90 (2026) that allow the facilities to pay outside medical providers and to bill the patient for the expense.
(b) The necessity of the amendment to this administrative regulation:
This amendment is necessary to ensure compliance with SB 90 (2026)
(c) How the amendment conforms to the content of the authorizing statutes:
The amendment conforms to the authorizing statutes by establishing the "Means test" for making a determination of a patient’s ability to pay and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities.
(d) How the amendment will assist in the effective administration of the statutes:
This amendment will assist in the effective administration of statutes by allowing the facilities to bill patients for payments made on their behalf to outside medical providers.
(3) Does this administrative regulation or amendment implement legislation from the previous five years?
Yes, this amendment addresses the provisions of SB 90 (2026).
(4) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
There are four (4) Intermediate Care Facilities (ICF's), three (3) state psychiatric hospitals, one (1) correctional psychiatric center, two (2) state nursing facilities, and approximately 840 patients.
(5) Provide an analysis of how the entities identified in question (4) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (4) will have to take to comply with this administrative regulation or amendment:
This administrative regulation adds a charge to patients for expenses incurred for the patient’s outside medical care while admitted to the facility. The facilities will need to bill patients for these expenses.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (4):
The cost to the facilities will be the administrative costs of billing patients, this will be a minimal additional cost.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (4):
The facilities will have the ability to pay for a patient’s outside medical expenses, as well as to bill the patient for those costs and potentially recoup the payment.
(6) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
The Department for Behavioral Health, Developmental, and Intellectual Disabilities estimates minimal cost to implement the proposed amendment.
(b) On a continuing basis:
The Department for Behavioral Health, Developmental, and Intellectual Disabilities estimates it will have minimal cost on a continuing basis.
(7) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation or this amendment:
This administrative regulation and this amendment will be funded through state general funds.
(8) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
There is no increase in fees or funding as a result of the proposed amendment because there will be minimal additional costs to the facilities.
(9) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
There are no new or increased fees as a result of the proposed amendment.
(10) TIERING: Is tiering applied?
Tiering is not applied because this administrative regulation will be applied in a like manner statewide.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 210.720(2), 210.720(3), and 210.750.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
The promulgating agency is the Cabinet for Health and Family Services, Department for Behavioral Health, Developmental and Intellectual Disabilities. DBHDID ran facilities include four (4) Intermediate Care Facilities (ICF's), three (3) state psychiatric hospitals, one (1) correctional psychiatric center, two (2) state nursing facilities. No other state agency, unit, part, or division is affected.
(a) Estimate the following for the first year:
Expenditures:
Minimal. Existing staff time for payment and billing is the only expenditure.
Revenues:
The department expects some revenue from payment received from patients from the billing.
Cost Savings:
Any revenue received from billing and receiving payment will offset the expenditure of paying for the outside medical expenses. (b) How will expenditures, revenues, or cost savings differ for subsequent years: They will not differ for subsequent years.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
They will not differ for subsequent years.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None
(a) Estimate the following for the first year:
Expenditures:
N/A
Revenues:
N/A
Cost Savings:
N/A
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
They will not differ for subsequent years.
(4) Identify additional regulated entities not listed in questions (2) or (3):
None
(a) Estimate the following for the first year:
Expenditures:
N/A.
Revenues:
N/A
Cost Savings:
N/A
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
The overall fiscal impact of this administrative regulation is minimal.
(b) Methodology and resources used to determine the fiscal impact:
The department reviewed the current process and compared that to the new requirements.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This administrative regulation will not have an overall negative or adverse major economic impact on the identified entities.
(b) The methodology and resources used to reach this conclusion:
The department reviewed the current process and compared that with the new requirements.
CABINET FOR HEALTH AND FAMILY SERVICES
Department for Behavioral Health, Developmental and Intellectual Disabilities
Division of Behavioral Health
(Amendment)
908 KAR 3:060.''Means test'' for determining patient liability and per diem rates.
Section 1.
Definitions.(1)
"Allowed deduction" means an amount disregarded or deducted from income and assets for the purpose of determining the ability to pay for services rendered by a facility.(2)
"Available assets" means resources of the patient or person responsible for the patient in accordance with KRS 210.720(3), less the allowed deductions.(3)
"Deductible" means an amount that a patient or person responsible for the patient is expected to pay toward the patient's care by a third-party payor such as Medicare or a private insurance company.(4)
"Facility" is defined by KRS 210.710(2).(5)
"Income" means funds received by the patient or person responsible for the patient and includes the following:(a)
Salaries;(b)
Wages;(c)
Self-employed gross revenues, less operating expenses;(d)
Benefit payments, except for Supplemental Security Income payments;(e)
Social Security payments;(f)
Rents;(g)
Royalties;(h)
Pensions;(i)
Retirement payments;(j)
Veteran's Administration payments;(k)
Black lung benefits;(l)
Railroad retirement benefits;(m)
Gifts;(n)
Settlements;(o)
Trust receipts;(p)
Alimony, but does not include child support payments;(q)
Interest income; and(r)
Income from investments.(6)
"Patient" means a person admitted to a facility.(7)
"Person responsible for the patient" is defined by KRS 210.710(5).(8)
"Personal needs allowance" means an amount of resources deducted from income for the patient's personal needs, including clothing and other miscellaneous items required by the patient.(9)
"Poverty guidelines" means the federal poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services, under the authority of 42 U.S.C. 9902(2).Section 2.
Determination of the Ability to Pay for Services Rendered at Facilities.(1)
The facility shall apply the means test to each patient who is admitted to the facility for treatment.(2)
(a)
The means test shall include a determination of the responsible party or parties to pay for the patient's care, which shall be documented using the Patient or Responsible Party Financial Record form.(b)
This form shall be explained to the patient or person responsible for the patient and signed by all parties.(c)
If the patient or person responsible for the patient refuses to sign, this refusal shall be noted on the form along with the date the form was discussed.(d)
Refusal to sign the form shall not absolve the liability of the patient or person responsible for the patient to pay for services rendered.(3)
The amount a patient or person responsible for the patient is required to pay for services shall be the lesser of:(a)
The cost per patient day in accordance with Section 7 of this administrative regulation, less any amount paid by Medicare, Medicaid, and other third-party payment sources; or(b)
The amount the patient is able to pay calculated in accordance with this administrative regulation.(4)
The facility shall determine the financial resources available to the patient or person responsible for the patient, including:(a)
Insurance and third-party payors;(b)
Income received or expected to be received during the period of hospitalization; and(c)
Available assets.(5)
Allowed deductions shall be calculated as the patient and the number of the patient's dependents.(a)
A patient's legally-recognized spouse and each individual less than eighteen (18) years of age who is in the patient's care shall be classified as dependents for purposes of calculating the poverty guidelines.(b)
Allowed deductions for the patient plus the patient's dependents shall be as follows:1.
One (1) shall be $2,000;2.
Two (2) shall be $4,000; or3.
Three (3) or more shall be $4,000 plus fifty (50) dollars added for each additional member over the initial two (2).(6)
The following shall be allowed deductions from income:(a)
Federal income taxes;(b)
State income taxes;(c)
Social security taxes;(d)
Normal retirement contributions;(e)
Unpaid medical and dental bills;(f)
Health insurance premiums;(g)
Medicare Part B insurance premiums;(h)
Long-term care insurance premiums;(i)
A personal needs allowance of sixty (60) dollars per month;(j)
Student loan payments;(k)
Bed-hold reservation costs at another facility for up to fourteen (14) days as long as the patient's stay is expected to be shorter than the reservation period;(l)
Child support payments;(m)
Life insurance premiums if the patient's estate or a funeral home is the named beneficiary on the policy; and(n)
A basic maintenance allowance, derived from the current Poverty Guidelines, for the size of the patient's family, if the following conditions are met:1.
The patient was maintaining a residence immediately prior to admission;2.
The residence will continue to be maintained during the period of hospitalization and resources of the patient are needed for this effort; and3.
Facility staff expects the patient's hospital stay to be three (3) months or less in duration.(7)
An estimated income tax related deduction of twenty-five (25) percent of total income shall be allowed instead of the actual wage taxes contained in subsection (6) of this section. A patient or person responsible for the patient may request that actual tax amounts be used instead of the estimated deduction, if the person can substantiate the actual tax amounts.(8)
The following shall be excluded from the calculation of available assets:(a)
Prepaid burial plans of up to $1,500 per family member;(b)
Automobiles;(c)
Housing structures;(d)
Land;(e)
Retirement accounts;(f)
Pension funds; and(g)
Trust funds that cannot be accessed;(h)
The applicable allowed deduction; and(i)
Other assets that are exempted under state law, if any.Section 3.
Calculation of the Amount the Patient or Person Responsible for the Patient is Able to Pay.(1)
The facility shall calculate the ability to pay amount utilizing either the Ability to Pay Worksheet or the Deductible Ability to Pay Worksheet as appropriate and by using the following formula:(a)
Determine the total amount of income of the patient or person responsible for the patient;(b)
Determine the amount of allowed deductions from income in accordance with Section 2(5) of this administrative regulation;(c)
Subtract the allowed deductions from income; and(d)
The remaining available income shall be divided by 365 to obtain the average daily income of the patient or person responsible for the patient.(2)
If the patient or person responsible for the patient has available assets, the facility shall:(a)
Determine the amount of available assets; and(b)
Include available assets that remain after the deduction in the patient or person responsible for the patient's ability to pay amount.(3)
Payments to be made on behalf of the patient by a third-party, such as Medicare, Medicaid, or private insurance companies, shall be subtracted from the facility's per diem rate as contained in Section 7 of this administrative regulation. Any remaining liability shall be satisfied as follows, with the exception of ability to pay amounts arising from deductibles:(a)
The available income of the patient or person responsible for the patient shall first be applied to the patient's liability for services;(b)
Any liability that remains after application of the average available income shall be satisfied by available assets; and(c)
The applicable average income per day and available asset amount per day shall be combined to determine the ability to pay amount. The ability to pay amount shall be charged for each day the patient is in the facility.(4)
Ability to pay liabilities arising from deductibles shall first be applied to available assets of the patient or person responsible for the patient with any remaining liability being satisfied with available income.(5)
If the Department for Medicaid Services performs an income assessment for a Medicaid patient residing in a nursing facility, intermediate care facility for an individual with an intellectual disability, or psychiatric hospital in accordance with 907 KAR 20:035, that Medicaid income assessment shall be relied upon instead of the ability to pay provisions established in this administrative regulation.(6)
(a)
After the ability to pay is determined for the patient or person responsible for the patient, a Patient or Responsible Party Financial Agreement and Assignment form shall be completed.(b)
This form shall be explained to the patient or person responsible for the patient and signed by all parties.(c)
If the patient or person responsible for the patient refuses to sign, this refusal shall be noted on the form including the date the form was discussed.(d)
Refusal to sign the form shall not absolve the liability of the patient or person responsible for the patient to pay for services rendered.(7)
The patient liability shall be calculated based on the United States Department of Health and Human Services poverty guidelines.Section 4.
Revisions to Ability to Pay Amounts.(1)
Facility staff shall update a patient's ability to pay amount to incorporate changes that take place subsequent to the initial determination. These changes may include:(a)
Income revisions;(b)
Asset revisions, including exhaustion of available assets;(c)
Change in allowed deductions;(d)
Change in a dependent of the patient or person responsible for the patient; or(e)
Change regarding the status of the person responsible for the patient.(2)
Upon a change to the ability to pay information, a revised Ability to Pay Worksheet or Deductible Ability to Pay Worksheet shall be prepared along with a revised Patient or Responsible Party Financial Record form and a revised Patient or Responsible Party Financial Agreement and Assignment form. The revised forms shall be presented to the patient or person responsible for the patient in the same manner as the original forms.Section 5.
Failure to Provide Financial Information or to Assign Benefits.(1)
If the patient or person responsible for the patient fails to or will not provide the information necessary to calculate the ability to pay amount, the maximum charge provided in Section 2(3)(a) of this administrative regulation shall be assessed.(2)
If the patient or person responsible for the patient fails to sign the assignment provision contained in the Patient or Responsible Party Financial Agreement and Assignment form, the maximum charge provided in Section 2(3)(a) of this administrative regulation shall be assessed.Section 6.
Payment Hardship, Appeal and Waiver Procedures.(1)
Payment hardships.(a)
If the patient or person responsible for the patient believes that payment of the ability to pay amount results in a financial hardship, the patient or person responsible for the patient may request to make installment payments.(b)
This request shall be made in writing to the facility's patient billing supervisor and shall include documentation to support the claimed hardship.(c)
The patient billing supervisor shall review the financial hardship request and render a payment plan decision within fifteen (15) days from the receipt of the hardship request. If there is financial hardship, the patient billing supervisor shall allow minimum monthly payments based on what the patient can reasonably afford.(2)
Appeals.(a)
If the patient or person responsible for the patient is aggrieved by the facility charges or a payment plan determined in accordance with this administrative regulation, that person may appeal the determination to the facility director or the facility director's designee for informal resolution within thirty (30) days of the ability to pay amount or payment plan being calculated.(b)
The facility director or the facility director's designee shall review the appeal and issue a determination within thirty (30) days of receipt.(c)
If the patient or person responsible for the patient is dissatisfied with the informal resolution, that person may file an appeal within thirty (30) days of the facility's response to the Director of the Division of Administration and Financial Management, Department for Behavioral Health, Developmental and Intellectual Disabilities, 275 E Main Street, Frankfort, Kentucky 40621. The director shall arrange for an administrative hearing in accordance with KRS Chapter 13B.(d)
The appeal request shall fully explain the patient's, or person responsible for the patient's, position and shall include all relevant documentation supporting the claim of financial hardship.(3)
Waivers.(a)
The director of each facility may waive payment of the facility's charges under this administrative regulation if waiver is in the best interest of all parties, based on the factors provided in paragraph (c) of this subsection.(b)
The Director of the Division of Administration and Financial Management shall have the authority to waive payment at any facility within the department if waiver is in the best interest of all parties, based on the factors provided in paragraph (c) of this subsection.(c)
When making a waiver determination, the following factors shall be considered:1.
Income;2.
Overall family debt;3.
Assets; and4.
Other information relating to the current financial situation of the patient or the person responsible for the patient.Section 7.
Per Diem Rates and separate charges.(1)
Facilities owned by the state shall charge:(a)
A per diem rate for room and board established using the last available Behavioral Health, Developmental and Intellectual Disability (BHDID) annual finance report, calculated using the equations on the Kentucky Facility Per Diem Rate Form; and(b)
A separate charge for treatment services as indicated in subsection (3) and (4) of this section.(2)
Current per diem rates shall be posted on the department's website and at each facility.(3)
A separate charge shall be imposed if the following treatment services are provided at a Department for Behavioral Health, Developmental and Intellectual Disabilities facility:(a)
Physician's services;(b)
EEG;(c)
EKG;(d)
Occupational therapy;(e)
Physical therapy;(f)
X-ray;(g)
Laboratory;(h)
Speech therapy;(i)
Hearing therapy;(j)
Psychology;(k)
Pharmacy;(l)
Respiratory therapy;(m)
Anesthesia;(n)
Electroshock therapy;(o)
Physician assistant;(p)
Advanced practice registered nurse; and(q)
Outpatient clinic services.(4)
In accordance with KRS 210.040(4), if a patient needs or requires care, treatment, or service from an outside medical provider, eligible costs shall be paid by the facility and a separate charge for the outside medical expense may be billed to the patient.Section 8.
Incorporation by Reference.(1)
The following material is incorporated by reference:(a)
"DBHDID 3:060-1 Ability to Pay Worksheet", November 2016;(b)
"DBHDID 3:060-2 Deductible Ability to Pay Worksheet", November 2016;(c)
"DBHDID 3:060-3 Patient or Responsible Party Financial Agreement and Assignment", November 2016;(d)
"DBHDID 3:060-4 Patient or Responsible Party Financial Record", July 2026; and(e)
"Kentucky Facility Per Diem Rate Form", November 2016.(2)
This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Behavioral Health, Developmental and Intellectual Disabilities, 275 East Main Street, Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m. Eastern Time/7 a.m. through 3:30 p.m. Central Time. This material may also be viewed on the department's web site at https://dbhdid.ky.gov/dpi908 KAR 3:060
KATHERINE R. MARKS, Ph. D., Commissioner
STEVEN J. STACK, MD, MBA, Secretary
APPROVED BY AGENCY: September 28, 2026
FILED WITH LRC: October 14, 2026 at 2:00 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall, if requested, be held on December 21, 2026, at 9:00 a.m. using the CHFS Office of Legislative and Regulatory Affairs Zoom meeting room. The Zoom invitation will be emailed to each requestor the week prior to the scheduled hearing. Individuals interested in attending this virtual hearing shall notify this agency in writing by December 14, 2026 five (5) workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who attends virtually will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on this proposed administrative regulation through December 31, 2026. Send written notification of intent to attend the public hearing or written comments on the proposed administrative regulation to the contact person. Pursuant to KRS 13A.280(8), copies of the statement of consideration and, if applicable, the amended after comments version of the administrative regulation shall be made available upon request.
CONTACT PERSON: Krista Quarles, Policy Analyst, Office of Legislative and Regulatory Affairs, 275 East Main Street 5 W-A, Frankfort, Kentucky 40621; Phone: 502-564-7476; Fax: 502-564-7091; CHFSregs@ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Jessica Beaubien, Krista Quarles; Phone Number: (502) 564-4527, (502) 564-7476; Email: jessical.beaubien@ky.gov, CHFSregs@ky.gov
Subject Headings:
Behavioral Health, Mental Health, Occupations and Professions, Substance Use
(1) Provide a brief summary of:
(a) What this administrative regulation does:
KRS 210.720(3) requires the secretary to adopt a "Means test" for determining the ability to pay of the patient or person responsible for the patient for board, maintenance, and treatment at a facility owned by the state. This administrative regulation establishes the "Means test" for making that determination and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities.
(b) The necessity of this administrative regulation:
This administrative regulation is necessary to establish the "Means test" for making that determination and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
This administrative regulation conforms to the authorizing statutes through fulfilling the requirements in KRS 210.720(2), 210.720(3), and 210.750.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
This administrative regulation assists the effective administration of the statutes by establishing the "Means test" for making a determination of a patient’s ability to pay and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities. (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
This amendment adds provisions from SB90 (2026) that allow the facilities to pay outside medical providers and to bill the patient for the expense.
(b) The necessity of the amendment to this administrative regulation:
This amendment is necessary to ensure compliance with SB 90 (2026)
(c) How the amendment conforms to the content of the authorizing statutes:
The amendment conforms to the authorizing statutes by establishing the "Means test" for making a determination of a patient’s ability to pay and establishes the patient cost per day for board, maintenance, and treatment at state owned facilities.
(d) How the amendment will assist in the effective administration of the statutes:
This amendment will assist in the effective administration of statutes by allowing the facilities to bill patients for payments made on their behalf to outside medical providers.
(3) Does this administrative regulation or amendment implement legislation from the previous five years?
Yes, this amendment addresses the provisions of SB 90 (2026).
(4) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
There are four (4) Intermediate Care Facilities (ICF's), three (3) state psychiatric hospitals, one (1) correctional psychiatric center, two (2) state nursing facilities, and approximately 840 patients.
(5) Provide an analysis of how the entities identified in question (4) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (4) will have to take to comply with this administrative regulation or amendment:
This administrative regulation adds a charge to patients for expenses incurred for the patient’s outside medical care while admitted to the facility. The facilities will need to bill patients for these expenses.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (4):
The cost to the facilities will be the administrative costs of billing patients, this will be a minimal additional cost.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (4):
The facilities will have the ability to pay for a patient’s outside medical expenses, as well as to bill the patient for those costs and potentially recoup the payment.
(6) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
The Department for Behavioral Health, Developmental, and Intellectual Disabilities estimates minimal cost to implement the proposed amendment.
(b) On a continuing basis:
The Department for Behavioral Health, Developmental, and Intellectual Disabilities estimates it will have minimal cost on a continuing basis.
(7) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation or this amendment:
This administrative regulation and this amendment will be funded through state general funds.
(8) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
There is no increase in fees or funding as a result of the proposed amendment because there will be minimal additional costs to the facilities.
(9) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
There are no new or increased fees as a result of the proposed amendment.
(10) TIERING: Is tiering applied?
Tiering is not applied because this administrative regulation will be applied in a like manner statewide.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 210.720(2), 210.720(3), and 210.750.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
The promulgating agency is the Cabinet for Health and Family Services, Department for Behavioral Health, Developmental and Intellectual Disabilities. DBHDID ran facilities include four (4) Intermediate Care Facilities (ICF's), three (3) state psychiatric hospitals, one (1) correctional psychiatric center, two (2) state nursing facilities. No other state agency, unit, part, or division is affected.
(a) Estimate the following for the first year:
Expenditures:
Minimal. Existing staff time for payment and billing is the only expenditure.
Revenues:
The department expects some revenue from payment received from patients from the billing.
Cost Savings:
Any revenue received from billing and receiving payment will offset the expenditure of paying for the outside medical expenses. (b) How will expenditures, revenues, or cost savings differ for subsequent years: They will not differ for subsequent years.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
They will not differ for subsequent years.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None
(a) Estimate the following for the first year:
Expenditures:
N/A
Revenues:
N/A
Cost Savings:
N/A
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
They will not differ for subsequent years.
(4) Identify additional regulated entities not listed in questions (2) or (3):
None
(a) Estimate the following for the first year:
Expenditures:
N/A.
Revenues:
N/A
Cost Savings:
N/A
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
The overall fiscal impact of this administrative regulation is minimal.
(b) Methodology and resources used to determine the fiscal impact:
The department reviewed the current process and compared that to the new requirements.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This administrative regulation will not have an overall negative or adverse major economic impact on the identified entities.
(b) The methodology and resources used to reach this conclusion:
The department reviewed the current process and compared that with the new requirements.