Hospital Rate Improvement Program: Ensuring Access & Better Quality
HB 75 sponsored by Representative Brandon Reed
- The Hospital Rate Improvement Program (HRIP) allows the state to draw down federal funds to pay a supplemental Medicaid payment to Kentucky hospitals. Hospitals pay an assessment to fund the state match.
- No state funds are used in the program.
- HRIP Payments are made quarterly, by applying a per discharge add-on to each inpatient claim that was paid in the prior quarter.
- CMS will permit an adjustment to HRIP to also cover outpatient treatment, which will allow rural hospitals to stabilize their finances.
- Currently, HRIP supplemental payments fill the gap between Medicaid rates and 90% of the average commercial rate. This applies to claims paid by MCOs.
- HRIP is a value-based program with a portion of the funds tied to quality improvement based on metrics agreed to by the hospitals, CMS, and the Cabinet for Health and Family Services.
- Hospitals have been achieving the required quality goals.
- Payment amounts vary from quarter to quarter based on changes in the number of patients treated.
- CMS must give approval each year for this enhancement to be continued.
- Legislation is needed to end the hospital assessment if CMS terminates the program.
James C. Musser
KHA Senior Vice President
Policy and Government Relations