Kentucky Hospital Association leaders told the Committee on Health Services that the Medicaid state-directed Hospital Rate Improvement Program (known in testimony as ATRIP) has increased hospital Medicaid payments, funded quality initiatives and supported statewide improvements in several clinical areas.

Nancy Galvani, senior KHA representative, and Jim Musser presented the program to the committee and described ATRIP as a Medicaid state-directed payment program that allows the state to draw down additional federal funds funded by a hospital provider assessment. They described the program as increasing Medicaid payments to roughly 95% of the average commercial payment rate for inpatient and outpatient services and as a value-based program that ties a portion of funding to quality-improvement measures.

Presenters said hospitals used ATRIP funds to expand sepsis screening and early treatment, reduce unplanned readmissions (from an indicated baseline near 10% to about 6% in one year in the materials cited by presenters), reduce infection rates, and sustain opioid-stewardship measures that have cut multiple-opioid prescriptions at discharge. KHA said ATRIP-funded work enabled screening of 98% of emergency-department patients for sepsis and screening of more than 1,000,000 ED patients for suicidal ideation; presenters said about 90% of patients older than 11 visiting EDs are screened for suicidal ideation and referred as appropriate.

KHA representatives said ATRIP has allowed hospitals to invest in staff training, processes and salaries, citing reduced vacancies and improved staff retention as a downstream benefit of the program. The association said without ATRIP, Kentucky hospitals would be operating at an average negative operating margin and some rural hospitals could be at risk of closure. Presenters also highlighted the 340B drug-purchase discount program as an important non-tax revenue source that lets safety-net hospitals redirect savings toward salaries and services.

Committee members asked about data, transparency and outcomes measurement. KHA said readmission reductions are being measured through claims data; social-determinants screenings and referral counts are being collected but longer-term tracking of whether referrals were completed would require linkage across community referral partners and raise HIPAA considerations. KHA described existing federal price-transparency rules and the good-faith-estimate requirement under the federal No Surprises Act and said hospitals are following both federal rules.

Presenters described a separate but related "Food Is Medicine" initiative, coordinated with the state Department of Agriculture and the Cabinet for Health and Family Services, that provides fresh local produce and proteins to patients; KHA said it intends to brief the committee on that program at a later date. Committee members expressed interest in using ATRIP-supported initiatives to address upstream drivers of chronic disease such as nutrition and transportation.

KHA said it collects and shares hospital claims and quality data with Medicaid and maintains a public transparency site with utilization trends; presenters noted Kentucky's all-payer claims database and existing reporting to the Department for Public Health as sources for analysis. KHA also cited national reports showing Kentucky's commercial hospital prices are low compared with other states and that Medicare and Medicaid payment limitations have increased pressure on hospital finances.

KHA representatives took questions from members representing rural districts and emphasized that ATRIP combined with other programs (including 340B and prior rebasing actions) has helped many rural hospitals remain open and stabilize staffing.