††††† 907 KAR 1:045. Reimbursement provisions and requirements regarding community mental health center services.


††††† RELATES TO: KRS 205.520(3), 210.370

††††† STATUTORY AUTHORITY: KRS 194A.030(2), 194A.050(1), 205.520(3), 42 C.F.R. 447.325, 42 U.S.C. 1396a-d

††††† NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health and Family Services, Department for Medicaid Services has responsibility to administer the Medicaid Program. KRS 205.520(3) authorizes the cabinet, by administrative regulation, to comply with any requirement that may be imposed or opportunity presented by federal law to qualify for federal Medicaid funds. This administrative regulation establishes the reimbursement provisions and requirements regarding community mental health center services provided to Medicaid recipients who are not enrolled with a managed care organization.


††††† Section 1. Definitions. (1) "Community mental health center" or "CMHC" means a facility which meets the community mental health center requirements established in 902 KAR 20:091.

††††† (2) "Department" means the Department for Medicaid Services or its designee.

††††† (3) "Enrollee" means a recipient who is enrolled with a managed care organization.

††††† (4) "Federal financial participation" is defined by 42 C.F.R. 400.203.

††††† (5) "Managed care organization" means an entity for which the Department for Medicaid Services has contracted to serve as a managed care organization as defined in 42 C.F.R. 438.2.

††††† (6) "Provider" is defined by KRS 205.8451(7).

††††† (7) "Recipient" is defined by KRS 205.8451(9).


††††† Section 2. General Reimbursement Provisions. (1) The department shall reimburse a participating in-state community mental health center as established in this subsection.

††††† (a) The payment rate that was in effect on June 30, 2002, for the community mental health center for community mental health center services shall remain in effect and there shall be no cost settling.

††††† (b) Allowable costs shall not:

††††† 1. Exceed customary charges which are reasonable; or

††††† 2. Include:

††††† a. The costs associated with political contributions;

††††† b. Travel or related costs for trips outside the state (for purposes of conventions, meetings, assemblies, conferences, or any related activities);

††††† c. The costs of motor vehicles used by management personnel which exceed $20,000 total valuation annually (unless the excess cost is considered as compensation to the management personnel); or

††††† d. Legal fees for unsuccessful lawsuits against the cabinet.

††††† (c) Costs (excluding transportation costs) for training or educational purposes outside the state shall be allowable costs.

††††† (2) To be reimbursable, a service shall:

††††† (a) Meet the requirements of 907 KAR 1:044, Section 4(2); and

††††† (b) Be medically necessary.


††††† Section 3. Implementation of Payment System. (1)(a) Payments shall be based on units of service.

††††† (b) One (1) unit for each service shall be defined as follows:


Unit of Service

Individual Outpatient Therapy

15 minutes

Group Outpatient Therapy

15 minutes

Family Outpatient Therapy

15 minutes

Collateral Outpatient Therapy

15 minutes

Psychological Testing

15 minutes

Therapeutic Rehabilitation

15 minutes

Medication Prescribing and Monitoring

15 minutes

Physical Examinations

15 minutes


15 minutes


15 minutes

Crisis Intervention

15 minutes

Service Planning

15 minutes

Screening, Brief Intervention, and Referral to Treatment

15 minutes

Mobile Crisis Services

1 hour

Assertive Community Treatment

Per Diem

Intensive Outpatient Program Services

Per Diem

Residential Crisis Stabilization Services

Per Diem

Residential Services for Substance Use Disorders

Per Diem

Partial Hospitalization

Per Diem

Day Treatment

1 hour

Comprehensive Community Support Services

15 minutes

Peer Support Services

15 minutes


††††† (2) An initial unit of service which lasts less than fifteen (15) minutes may be billed as one (1) unit.

††††† (3) Except for an initial unit of a service, a service that is:

††††† (a) Less than one-half (1/2) of one (1) unit shall be rounded down; or

††††† (b) Equal to or greater than one-half (1/2) of one (1) unit shall be rounded up.

††††† (4) An individual provider shall not exceed four (4) units of service in one (1) hour.

††††† (5) An overpayment discovered as a result of an audit shall be settled through recoupment or withholding.

††††† (6) A community mental health center shall maintain an acceptable accounting system to account for the:

††††† (a) Cost of total services provided;

††††† (b) Charges for total services rendered; and

††††† (c) Charges for covered services rendered eligible recipients.

††††† (7) A community mental health center shall make available to the department all recipient records and fiscal records:

††††† (a) At the end of each fiscal reporting period;

††††† (b) Upon request by the department; and

††††† (c) Subject to reasonable prior notice by the department.

††††† (8) Payments due a community mental health center shall be made at least once a month.


††††† Section 4. Nonallowable Costs. The department shall not reimburse:

††††† (1) Under the provisions of this administrative regulation for a service that is not covered by 907 KAR 1:044; or

††††† (2) For a community mental health center's costs found unreasonable or nonallowable in accordance with the Community Mental Health Center Reimbursement Manual.


††††† Section 5. Reimbursement of Out-of-state Providers. Reimbursement to a participating out-of-state community mental health center shall be the lesser of the:

††††† (1) Charges for the service;

††††† (2) Facility's rate as set by the state Medicaid Program in the other state; or

††††† (3) Upper limit for that type of service in effect for Kentucky providers.


††††† Section 6. Appeal Rights. A community mental health center may appeal a Department for Medicaid Services decision as to the application of this administrative regulation in accordance with 907 KAR 1:671.


††††† Section 7. Not Applicable to Managed Care Organization. A managed care organization shall not be required to reimburse for community mental health center services in accordance with this administrative regulation.


††††† Section 8. Federal Approval and Federal Financial Participation. The departmentís reimbursement for services pursuant to this administrative regulation shall be contingent upon:

††††† (1) Receipt of federal financial participation for the reimbursement; and

††††† (2) Centers for Medicare and Medicaid Servicesí approval for the reimbursement. (Recodified from 904 KAR 1:045, 5-2-1986; Am. 13 Ky.R. 387; eff. 9-4-1986; 14 Ky.R. 312; eff. 9-10-1987; 15 Ky.R. 1980; eff. 3-15-1989; 16 Ky.R. 9-20-1989; 17 Ky.R. 574; eff. 10-14-1990; 18 Ky.R. 916; eff. 10-16-1991; 19 Ky.R. 323; eff. 8-28-1992; 20 Ky.R. 664; eff. 10-21-1993; Am 1364; eff. 2-16-2004; 31 Ky.R. 461; 717; eff. 11-5-2004; 32 Ky.R. 405; 685; eff. 10-14-2005; TAm 7-16-2013; 40 Ky.R. 1959; 2492; 2721; eff. 7-7-2014.)