Commonwealth of Kentucky, Cabinet for Health and Family Services, Department for Medicaid Services v. Mountain Comprehensive Care Center, Inc.

── Commonwealth of Kentucky, Cabinet for Health and Family Services, Department for Medicaid Services v. Mountain Comprehensive Care Center, Inc. ── Court: Court of Appeals of Kentucky Date: May 08, 2026 Author: A. Jones Category: General RENDERED: MAY 8, 2026; 10:00 A.M. TO BE PUBLISHED Commonwealth of Kentucky Court of Appeals NO. 2025-CA-0122-MR COMMONWEALTH OF KENTUCKY, CABINET FOR HEALTH AND FAMILY SERVICES, DEPARTMENT FOR MEDICAID SERVICES APPELLANT APPEAL FROM FLOYD CIRCUIT COURT v. HONORABLE JOHNNY RAY HARRIS, JUDGE ACTION NO. 24-CI-00318 MOUNTAIN COMPREHENSIVE CARE CENTER, INC.; STEPHANIE SIMMONS, AS NEXT FRIEND OF JOHN DOE #1, A MINOR; AND TELLA HOWARD, AS NEXT FRIEND OF JOHN DOE #2, A MINOR APPELLEES AND NO. 2025-CA-0166-MR RUSSELL COLEMAN, ATTORNEY APPELLANT GENERAL, ON BEHALF OF THE COMMONWEALTH OF KENTUCKY APPEAL FROM FLOYD CIRCUIT COURT v. HONORABLE JOHNNY RAY HARRIS, JUDGE ACTION NO. 24-CI-00318 COMMONWEALTH OF KENTUCKY, CABINET FOR HEALTH AND FAMILY SERVICES; DEPARTMENT FOR MEDICAID SERVICES; MOUNTAIN COMPREHENSIVE CARE CENTER, INC.; STEPHANIE SIMMONS, AS NEXT FRIEND OF JOHN DOE #1, A MINOR; AND TELLA HOWARD, AS NEXT FRIEND OF JOHN DOE #2, A MINOR APPELLEES OPINION REVERSING AND REMANDING ** ** ** ** ** BEFORE: THOMPSON, CHIEF JUDGE; CALDWELL AND A. JONES, JUDGES. JONES, A., JUDGE: These consolidated appeals arise from the Floyd Circuit Court’s order declaring portions of 2023 House Bill 56 (“HB 56”) unconstitutional and enjoining their enforcement. In the relevant part, HB 56 governs the provision and reimbursement of behavioral health services under Kentucky’s Medicaid program, including reimbursement to community mental health centers for services provided outside their designated regional service areas. Appellees challenged the statute on equal protection and due process grounds, and the circuit court agreed, concluding that HB 56 creates an arbitrary, -2- geographically based classification lacking a rational basis. The Cabinet for Health and Family Services and the Attorney General appeal. Because HB 56 is rationally related to legitimate governmental interests, Appellees failed to carry their burden of demonstrating that the statute is unconstitutional. Accordingly, we reverse and remand for adjudication of the Appellees’ remaining claims. I. PARTIES Appellee, Mountain Comprehensive Care Center (“MCCC”), is a nonprofit corporation organized under the laws of the Commonwealth of Kentucky and is enrolled in the Kentucky Medicaid Program as a “regional community services program” operating as a community mental health center (“CMHC”). Pursuant to KRS1 210.370(1)(k), MCCC is designated to Service Area Eleven, which includes Johnson, Magoffin, Martin, Floyd, and Pike Counties, and is headquartered in Prestonsburg, Floyd County, Kentucky. MCCC provides mental health, substance use, and developmental and intellectual disability services to Medicaid beneficiaries both within and outside of its regional service area. It has been in existence since 1966. Appellees, John Doe #1 and John Doe #2, are participants in the Kentucky Medicaid Program who receive community-based mental health services 1 Kentucky Revised Statutes. -3- from MCCC in Bath County. Bath County lies outside MCCC’s designated service area and is instead part of Service Area Nine, which includes Rowan, Montgomery, Menifee, Morgan, and Bath Counties. KRS 210.370(1)(i). Appellant, the Cabinet for Health and Family Services (“the Cabinet”), is an agency of the Commonwealth of Kentucky responsible for administering the Kentucky Medicaid Program, including the