Hospitals Receive Medicaid Quality Incentive Payments; Check that Your Managed Care Payments Are Accurate

August 4, 2016

Effective July 1, 2016, the majority of Washington hospitals  paid under prospective payment system became eligible for a one-percent quality incentive increase to their Medicaid inpatient payment rates (for both inpatient APRDRG and per diem rates).  This is a significant increase in the number of hospitals qualifying.

Hospitals that received the increase last year will not see any change in their rate, but hospitals that are newly qualifying should see a rate change.   Since Medicaid managed care plans typically contract with hospitals based on the state’s posted rates, the increase will also likely impact managed care inpatient services.  The state recently sent rate notices to hospitals which show an August 1 effective date for the state fee-for-service payments.   We were told, however, that the state’s ProviderOne system will apply the increases as of July 1.  The Health Care Authority will also update the posting on its website to reflect the July date.  We recommend hospitals that qualify for the increases for SFY 2017 monitor their fee-for-service and managed care claims to ensure payments for inpatient services with July dates appropriately reflect the quality incentive increase. (Andrew Busz,


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