Representative Brandon Reed introduced HB 75 in the Kentucky House of Representatives earlier in January. The legislation would adjust a current Medicaid inpatient program to include outpatient care as well. The Medicaid Hospital Rate Improvement Program (HRIP), which allows Kentucky hospitals to receive additional federal dollars to increase Medicaid reimbursement for inpatient Medicaid services, was passed twice by the legislature – in 2019 and revised in 2021, and it operates at no cost to the state.
Hospitals pay an assessment that provides state matching funds, and they receive additional payment for each inpatient Medicaid patient they serve.
“Costs are rising for hospitals just as they are for every business; however, hospitals cannot just renegotiate reimbursement rates from government programs,” stated KHA President and CEO Nancy Galvagni. “In Kentucky, 70-80% of our hospitals’ patients are covered by Medicare or Medicaid, and it’s an even higher rate in our crucial rural hospitals. HB 75 will be a lifeline to these hospitals to ensure they can continue to provide high-quality care the Commonwealth deserves.”
This is a value-based program meaning hospitals must earn part of the payment by achieving certain quality care metrics – goals Kentucky hospitals are meeting.
Outpatient HRIP will operate the same way as the inpatient program, by allowing hospitals to receive increased reimbursement for the outpatient services they provide to Medicaid patients.
The inpatient program has been a lifeline to hospitals that suffered COVID losses, dealt with rising inflation, faced skyrocketing labor costs in the midst of a nationwide nursing shortage.
“As of 2022, Kentucky hospitals had 5,100 vacant nursing positions,” noted Galvagni. “Because the nursing shortage is national, Kentucky hospitals are competing with other states at a national rate of pay. Our hospitals are still relying on travel nurses to provide care, which is adding to the financial burden. Money spent on nursing premium pay and contract labor has soared since before the pandemic – an 876% increase overall – so an adjustment to the HRIP program could be what keeps many of our facilities afloat.”
