Kentucky’s peer support workforce for addiction recovery faces a dramatic reduction in available positions and funding starting January 1, when new state licensing standards take effect under House Bill 505, signed into law by Gov. Andy Beshear on April 5, 2024. As of December 20, only 50 peer support specialists had met the new licensing requirements compared with 16,883 certified under previous standards, according to state data.
The Licensing Transition Problem
The law requires peer support specialists to earn a new credential as registered alcohol and drug peer support specialists to continue working in treatment and recovery settings or receive Medicaid reimbursement. While the law permits specialists to work under a temporary credential during the transition, Kentucky Medicaid does not reimburse services provided by those with only temporary credentials, according to Kendra Steele, spokesperson for the Cabinet for Health and Family Services. This conflict between state law and Medicaid policy creates a gap that affects thousands of workers. More than 650 peer support workers have qualified for temporary status and more than 300 have applied, but Medicaid will not pay for their services.
Chris Sudduth, a 43-year-old peer support specialist from Georgetown earning $15–$18 an hour, described the situation as devastating. “I’m terrified. I’ve invested all this time getting certifications that because of the new law I’m not going to be able to use,” he said. His hours have already been cut from 40 to 20 at multiple employers.
Seeking Solutions
On Friday, a lawyer representing Grin Grant Inc., a Lexington nonprofit that trains peer support specialists, submitted a formal request to suspend enforcement of the new law, citing the state’s failure to enact required regulations with only 13 days before implementation. Rep. Kim Moser, chair of the House Health Services Committee and sponsor of HB 505, has discussed allowing a grace period with the Department of Medicaid Services and is working on legislation for the 2026 legislature to address problems.
The original impetus for the licensing overhaul was rising suspicions of Medicaid abuse by some providers. Kentucky Medicaid payments for psychoeducation—a peer support service—rose from $35 million in 2023 to $166 million in 2024. After Kentucky Medicaid stopped reimbursing peer support for psychoeducation beginning January 1, 2025, spending dipped by 68% to $53 million this year.
Rep. Adam Moore, D-Lexington, stated the law’s unintended consequences are now clear: “HB 505 tried to professionalize the field, but applying clinical licensing rules to a non-clinical role has had clear unintended consequences.”
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://kentuckylantern.com/2025/12/22/kentucky-set-to-pull-funding-from-much-of-recovery-peer-support-is-asked-to-reconsider/