Andy Beshear Set Out to Make Drug Treatment Widely Available in Kentucky. Fraud and Abuse Followed.

Experts disagree with Kentucky Gov. Andy Beshear’s belief that loosening Medicaid guardrails helped alleviate the state’s drug crisis. Ryan Hermens/Lexington Herald-Leader

By the end of 2020, Kentucky’s newly elected Gov. Andy Beshear had one goal above all others: Keep people alive. The state was battling two merciless threats. COVID-19 was killing hundreds of people each month, and deadly drug overdoses were among the highest in the nation. Calling addiction a disease that breeds in isolation, Beshear worried people would stop seeking treatment for fear of contracting COVID-19.

So Beshear set out to make drug treatment easier to access. Kentucky joined more than 40 other states in lifting some restrictions on Medicaid, which served most of the Kentuckians enrolled in substance abuse programs: Recovery centers were allowed to offer expensive treatment to clients without seeking approval from state Medicaid insurers.

By 2023, as the pandemic waned, other states restored Medicaid requirements that treatment centers gain prior approval before providing addiction treatment. Kentucky stayed the course. That year, providers offered more than 1,100 spots for people seeking long-term treatment that allows them to live in a facility, a state record and more slots per capita than any other state.

But as the Medicaid bills for all that treatment started piling up, so did the warnings.

In 2024 letters to Beshear’s administration and in at least three public meetings, experts across the health industry said that as a result of the 2020 changes, drug treatment providers were billing too much for subpar care that was leading to worse outcomes. By December 2025, the Kentucky attorney general’s office said Medicaid fraud in drug treatment had become a primary “area of concern.”

Despite the warnings, the Beshear administration did little to rein in the skyrocketing state spending.

Almost all those warnings came true.

In a February 2025 meeting about soaring Medicaid costs,…