A new state regulation could provide Kentucky counties with an estimated $12 million in additional reimbursement for medical care provided to state inmates housed in county jails.
The state Department of Corrections on Aug. 17, 2026 filed an emergency regulation – 501 KAR 2:080E – addressing medical care for state inmates. The regulation follows the conclusion of a 2023 lawsuit filed by the Kentucky Jailers Association and five counties over the responsibility for medical costs associated with state inmates.
Members of the General Assembly’s Budget Review Subcommittee on Justice and Judiciary heard testimony last week from the Justice and Public Safety Cabinet regarding the new regulations. Click here for more information on that testimony.
Rising medical costsThe cost of providing medical care in county jails has continued to increase, adding to the financial pressure facing county governments.
In FY2025, county jail medical costs totaled approximately $42 million, excluding Fayette and Jefferson counties. This figure does not include the cost of jail personnel.
Medical costs increased approximately 47% between FY2019 and FY2025, while overall jail expenditures increased by only 25.7%.
What the emergency regulation means for counties
The new emergency regulation provides more detailed guidance on what constitutes “routine care” and “care beyond routine.” Under the new guidance, more medical services for state inmates will fall under the definition of “care beyond routine,” requiring the state to reimburse counties for those costs.
Some of the services that are now included as “care beyond routine” include:
- Inpatient hospitalization
- Surgical procedures
- Specialty care
- Advanced diagnostic services, including CT scans and MRIs
- High cost or specialty pharmaceuticals
- Long-term or intensive treatments, such as dialysis
DOC estimates that the new definition could result in approximately $12 million in additional reimbursement payments to counties for state inmate medical care.
New reimbursement requirements
The regulation also establishes new procedures counties must follow to receive reimbursement.
When feasible, counties must submit a Request for Authorization form to DOC at least 72 hours before a medical service is scheduled. If advance authorization is not feasible, the county must submit the form as soon as it becomes aware of the need for care.
Counties must also price medical bills to a rate not exceeding the Medicaid rate for the same or similar services before receiving reimbursement.
Background - state inmates in county jailsState inmates make up more than a third of Kentucky’s county jail population. In fiscal year 2026, an average of 7,098 state inmates were housed in county jails each week.
KRS 532.100 requires most Class D felony inmates and some Class C felony inmates to serve their sentence in a county jail. County jails also house other state inmates, including controlled intake inmates awaiting classification by DOC, parole violators and alternative sentencing participants.
The state currently provides counties with a $35.34 per diem reimbursement for each state inmate beginning on the day of sentencing. This per diem covers just over half the average cost of incarceration, falling short of the $63.44 average daily cost per inmate in FY2025.
State law also requires the state to pay for “the costs of necessary medical, dental, or psychological care, beyond routine care and diagnostic services” for state inmates under KRS 441.045.
However, state law does not define what constitutes “routine care.” DOC previously interpreted the term broadly to include medical, psychological and dental care that did not require a hospital stay of at least one night or general anesthesia.
As a result, counties have been responsible for a significant share of the medical, psychological and dental costs associated with state inmates housed in their jails.
What’s nextDOC also filed a companion ordinary regulation, 501 KAR 2:080, on Aug. 17. This proposed regulation contains the same provisions as the emergency regulation and will go through the standard administrative regulation process.
A public hearing is scheduled for Nov. 24, 2026, at 9 a.m. ET at the Justice and Public Safety Cabinet office in Frankfort. Written comments will be accepted through Nov. 30.
The new regulation represents a significant first step toward addressing the financial responsibility for medical care provided to state inmates in county jails. KACo will continue to monitor implementation of the regulation and its impact on county jail operations and budgets.
