Hospital payments follow quality measures and board approval

The enterprise pays hospitals added amounts based on performance in the Hospital Quality Incentive Program. Payments go to hospitals providing services intended to improve patient outcomes. Payments require federal approval and adequate funding. The program includes a workplace violence measure and aims to improve patient outcomes and reduce preventable use of care.

The enterprise board approves the program’s payment percentage, structure, measures, and scoring method before it begins. These rules apply to the Hospital Quality Incentive Program’s design and measures. New measures stay in place for a defined period of up to three years before changes, unless evidence shows they are missing program goals or need technical adjustments. Other program changes need board approval before taking effect, except changes needed to comply with federal law may take effect immediately. Measures must focus on factors hospitals can reasonably control, follow national standards as much as practical, and limit paperwork. The board approves the program before implementation and most changes before they take effect.

Annual payments under the program cannot exceed 7% of the previous state fiscal year’s hospital reimbursements, or 9% after board approval of a qualifying program. The limit applies to total payments made to hospitals under the program. Before the limit can rise, the board must formally approve a program developed with input from hospital representatives with clinical expertise. The 7% limit applies unless and until the board formally approves the qualifying program; after approval, the 9% limit applies.

The enterprise uses hospital provider fee money to fund the Hospital Quality Incentive Program. This concerns hospital provider fee cash fund money managed by the enterprise. Federal approval is required. Spending is subject to annual appropriation by the General Assembly.