FRANKFORT, Ky. — Hospitals in Kentucky are in dire straits, according to the Kentucky Hospital Association. 

What You Need To Know

  • Kentucky lawmakers created the Hospital Rate Improvement Program in 2019

  • It supplements pay for hospitals based on the number of Medicaid patients they take in

  • The Kentucky Hospital Association warned lawmakers that without an expansion of the program, some hospitals could face closure

“We are way underwater,” KHA President Nancy Galvagni told lawmakers Wednesday. “And I have had so many CEOs tell me, from all across the state, that they don’t know what they would have done had we not had the HRIP program.”

The program Galvagni is talking about is the Hospital Rate Improvement Program, created by lawmakers in 2019 and revised in 2021. The program provides some extra help to hospitals for each Medicaid patient they take — help Galvagni said many hospitals need.

“Hospitals, we’re expecting to have a loss, and we’re starting to hear that,” she said. “We’re starting to hear about layoffs in our own state, hospitals maybe having to shut beds down, so we’re seeing across the country and we’re starting to see it here.”

Several factors play in to why hospitals are struggling.  

Galvagni said Medicare and Medicaid don’t cover the full cost of care, but that’s 70 to 80 percent of all patients. Rural hospitals generally take in more Medicare and Medicaid patients than urban ones.

COVID-19 also put a financial strain on hospitals, especially after relief funds stopped and they still had to deal with Delta and Omicron strains.

“And hospitals, contrary to what many people believe, did not make money from treating COVID patients,” Galvagni said.

Staff shortages are another issue.

“Hospitals don’t have the staff to even staff all of their beds, so we’re very concerned about access,” Galvagni said. “We’re concerned about patient delays.”

HRIP money only comes in for inpatient care. Galvagni is asking lawmakers to extend it to outpatient care, which would include a lot more procedures, many of them routine.

Kentucky Health and Family Services Secretary Eric Friedlander threw his support behind the expansion, too.

“There are not many pieces of legislation that get passed and implemented — we’ll take credit for the implementation — that save an industry,” Friedlander said. 


The earliest lawmakers could expand it would be when the session starts in January.