"Hip" and "Hep"

On last night's Mad Men ("Dark Shadows"), dinosaur Bert Cooper seeks to correct asshole Pete Campbell's use of the word "hip." "Hep," he offers as a replacement.

Looking up the two words at dictionary.com we discover the following definition of hip:

adjective, hip·per, hip·pest. 1. familiar with or informed about the latest ideas, styles,developments, etc.: My parents aren't exactly hip, you know. 2. considered aware of or attuned to what is expected, especially with a casual or knowing air; cool: The guy was not at all hip—atotal nerd. 3 in agreement or willing to cooperate; going along: We explained our whole plan, and she was hip.

"Hep," on the other hand,  glossed as "aware, up-to-date," was

first recorded 1908 in "Saturday Evening Post,"but said to be underworld slang, of unknown origin. Variously said to have been the name of "a fabulous detective who operated in Cincinnati" or a saloonkeeper in Chicago who "never quite understood what was going on ... (but) thought he did." Taken up by jazz musicians by 1915; hepcat "addict of swingmusic" is from 1938. [my italics]

No wonder Bert Cooper--"never quite underst[anding] what [is] going on ... (but) [thinking] he [does]"--offers his correction.