Rather than basing rates on cost per admission, the new plan is based on population. It ties hospital reimbursement to the projected services of a specific population. In the state's 2012 fiscal year, about 10 hospitals in the state, mostly in rural areas, already followed a population-based model. Under that model, hospitals get a set amount of annual revenue to treat patients in their population. This gives hospitals an incentive to reduce unnecessary admissions, testing and other things that may drive up costs.