Chris Sudduth sold drugs to support a long addiction to heroin and methamphetamine, netting himself a criminal record.
While that resume would put off many employers, it eminently qualifies Sudduth for the job he’s done the last three years — work that he loves and worries he will soon lose because of a change in Kentucky law.
Sudduth is a peer support specialist, earning $15-$18 an hour to help other people who are trying to overcome substance abuse. The support role is recognized as vital in recovery.
On Jan. 1, Kentucky’s licensing standards will change, making thousands of peer support specialists, including Sudduth, no longer eligible to work in many treatment and recovery settings or be paid through Medicaid, the federal-state program that is the financial backbone of many recovery providers.
As of Dec. 20, only 50 peer support specialists had met the new licensing requirements compared with 16,883 who are certified under the previous standards.
“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,” said Sudduth, 43, of Georgetown. “All of this is just surreal. I’m afraid I’m going to lose my apartment, everything I’ve worked for these three years. Even more I’m afraid I’m going to lose my sobriety over it.”
Displacing and defunding much of Kentucky’s peer support workforce appears to be an unintended consequence of House Bill 505, which the legislature approved almost unanimously and Gov. Andy Beshear signed on April 5, 2024. The new law takes effect Jan. 1. On Friday, state officials received a formal request to suspend its enforcement from a lawyer representing a Lexington nonprofit, Grin Grant Inc. (GGI), that trains peer support specialists.
In a letter addressed to state Health and Family Services Secretary Steven Stack and Karyn Hascal, chair of the Kentucky Board of Alcohol and Drug Counselors, attorney Frank Miller Jr. says the board has yet to enact regulations as required by the new law. “The absence of rules for compliance with a new law (effective in 13 days) works an undue burden on GGI and thousands of others,” Miller wrote.
“We would like to see the problems get fixed,” Miller told the Lantern, asserting that the relevant state agencies have the leeway to pause enforcement.
‘A very vulnerable population’
Stack’s cabinet has previously pointed to a conflict between the new law and Kentucky Medicaid reimbursement rules.
The law has a provision permitting peer support specialists to keep working and be reimbursed under a temporary credential as they earn the new designation of registered alcohol and drug peer support specialist.
However, Kentucky Medicaid does not pay for services provided by someone with a temporary credential, Kendra Steele, a spokesperson for the Cabinet for Health and Family Services (CHFS), told the Lantern last week.
It’s unclear how or why almost 20 months elapsed without the state’s Medicaid payment schedule being reconciled with the new state law.
More than 650 peer support workers have qualified for the new temporary status and more than 300 have applied for it.
But Medicaid will not be paying them.
“Kentucky Medicaid is bound by law, and starting January 1st, cannot pay for services provided by someone with only the temporary credential established under HB 505,” Steele said in an email. “The requirements for temporary providers established under HB 505 conflict with Medicaid’s established provider requirements for reimbursement. Kentucky Medicaid will continue to pay for peer support services provided by individuals who have completed the full registration process with the Kentucky Board of Alcohol and Drug Counselors.”
Steele also said, “Team Kentucky values the vital role that peer support specialists play in helping those dealing with addiction across the commonwealth.”
Peer support employers are looking for workarounds and cutting back. Residential treatment centers and outpatient behavioral health service providers are not allowed to employ peer support workers who lack a new credential after Jan. 1, according to a FAQ document issued by the state in October.
Sudduth said he’s already feeling it. “My hours have been cut almost every place I work — 40 hours to 20 hours — because they don’t know how to navigate the new laws.”
Peer support duties range from providing transportation to medical appointments and court dates to teaching problem-solving skills to individuals and groups. Peer support specialists share their first-hand experiences of addiction and hope with clients who are new to treatment and recovery.
Mary Helen Shashy, founder of the Lexington nonprofit that is seeking a suspension of the new law, says there is a “clear and repeatedly studied connection between sobriety and employment.”
“Thousands of people are losing their jobs Jan. 1 — a very vulnerable population,” Shashy said.
Sarah Vaughn, a consultant who works with Shashy and recovery providers, said, “You’re going to have a very vulnerable population becoming unemployed, and these are people who might relapse back into using. And, at the same time, people who are earlier in recovery are going to lose the benefits they get from a peer who is supporting them.”
Response to suspected Medicaid abuse
Rep. Kim Moser, chair of the House Health Services Committee and sponsor of the new law, said she has talked with the Department of Medicaid Services about allowing a grace period for recovery peer support specialists to continue to work and be paid through Medicaid while earning the newly required credential.
Moser, R-Independence, also is working on a bill for the 2026 legislature that she hopes will relieve some of the problems.
The impetus for revamping peer support was rising suspicions that some providers were misusing peer support to overbill Medicaid and that this perceived abuse could result in a decision to cut off Medicaid funding for peer support altogether, said Alaina Sweasy, a lobbyist and consultant on substance use treatment. Her company, Lane13 Consulting, provides peer support training.
In 2024, she was representing some members of the Kentucky Association of Independent Recovery Organizations (KAIROS), a coalition of for-profit providers, and working with Moser on HB 505. She said she’s no longer working with KAIROS.
Sweasy recently told the Lantern the legislation has not worked out as expected. “No, no, absolutely, not at all.”
‘A lot more overhaul’ needed
Even amid the awareness that peer support was under scrutiny, providers billed Medicaid for peer support at a skyrocketing pace. Kentucky Medicaid payments for psychoeducation rose from $35 million in 2023 to $166 million in 2024. Psychoeducation supports clinical care by informing clients and their families about their conditions and treatment options and by teaching coping and communications skills.
Sudduth, the peer support specialist, said the swelling volume “diluted” peer support. “For a while they were giving certificates to whoever,” said Sudduth, who is studying for a degree in social work from the University of the Cumberlands. “In theory sharpening the standards is a good idea but the way the state is doing it needs a lot more overhaul.”
By late 2024, Kentucky Medicaid announced that peer support would no longer be reimbursed for providing psychoeducation, beginning Jan. 1, 2025.
Since then, Medicaid spending on psychoeducation dipped by 68% this year to $53 million, according to information presented to lawmakers last week by the attorney general’s Office of Medicaid Fraud and Abuse Control.
Meanwhile, the private insurers who process and pay Medicaid claims in Kentucky have tightened reimbursements to recovery and other behavioral health providers, putting an additional pinch on peer support.
Federal prosecutors recently obtained a guilty plea from a peer support specialist in Lexington who worked for a sober living home that investigators say schemed to bill Medicare and Medicaid $26.7 million for unnecessary urine tests. The owner of the sober living home has pleaded guilty to soliciting kickbacks from companies that performed the tests. The indictment says the company also billed Medicaid for peer support services that did not meet state requirements or were not performed at all.
Kentucky’s largest treatment provider, the for-profit Addiction Recovery Care, came under FBI investigation more than a year ago for possible health care fraud.
A board for peer support?
Shashy and Sudduth say it’s unfair to punish the lowest-paid recovery workers for actions taken by those at the top. “Go after the bad actors,” Sudduth said. “Don’t go after the industry as a whole. Most (peer) supports don’t know the first thing about billing, we just put in for the hours we work.”
Aside from the looming prospect of unemployment for many peer support specialists, people interviewed for this article pointed to what they say are other problems with the new law, including the cost to low-paid peer support workers of new training and supervision and other fees associated with obtaining the credentials, as well as a shortage of board-approved supervisors. Shashy says some peer support specialists are taking employer-issued loans of about $1,800 to try to stay compliant.
She and others also caution that the new standards are geared to qualifying for a clinical role rather than one of peer support.
Among those looking for a solution are Rep. Adam Moore, D-Lexington. “I don’t think anyone intended to shut down peer support. HB 505 tried to professionalize the field, but applying clinical licensing rules to a non-clinical role has had clear unintended consequences. Even providers who supported the bill now see the harm,” he said.
The Board of Alcohol and Drug Counselors had 478 peer support applications pending last week, some of which require additional documentation from the applicant and some that have not yet come before the board, said a spokesperson for the Public Protection Cabinet.
One of the options being considered by Moser, the lawmaker trying to craft a legislative fix, is creating a separate licensing board for peer support encompassing its full scope, not just recovery, but other aspects of mental health, including gambling disorder, as well.
Jennifer McMinn, vice president of recovery at Volunteers of America (VOA) Mid-States, says a separate board for peer support is a good idea.
VOA employs 14 to 16 peer support specialists in Louisville and Manchester. Two or three of them had completed the requirements to become registered under the new law when McMinn spoke to the Lantern earlier this month. The others had temporary status, meaning they can work but their wages can’t be reimbursed by Medicaid. That puts a financial strain on the nonprofit, but ending peer support is not an option, she said. “It’s a crucial part of treatment.”
‘Their product is hope’
The law will not disrupt peer support for providers that don’t bill Medicaid. That includes Voices of Hope, a recovery community organization that is built on peer support and reaches into about 30 counties from its Lexington base.
Of its 70 staff members, 96% are in recovery, said Jimmy Chadwell, the organization’s president, who also stressed that having a job helps people stay in recovery.
Grants fund Voices of Hope, including federal money from the Kentucky Overdose Response Effort (KORE), and settlements with drug companies through the Kentucky Opioid Abatement Commission.
Voices of Hope calls its peer support team “recovery coaches” and pays them a little over $17 an hour. Chadwell says they are “integral to recovery.”
“I’ve heard it described as reaching back into the fire to pull someone out. … Their product is hope.”
While the disruption in peer support funding won’t directly affect his organization, Chadwell worries about its broader effects as Kentucky tries to overcome one of the nation’s deadliest and most pervasive opioid crises.
“I think as a community and a state we have momentum in addressing substance use disorder. Now is not the time to take our foot off the gas. If the statistics show even a slight improvement, now is not the time to let up.”
This article appears in Dec. 1-31, 2025.