‘This isn’t about hospital systems, this is about people’

FORT WAYNE, Ind. (WPTA) – An Indiana House bill aimed at lowering the cost of healthcare is one step closer to becoming law.

HB 1004 passed out of the House yesterday and now moves onto the Senate.

BACKGROUND: New proposed bill to drop Indiana healthcare costs by as much as 40%

The bill hopes to hold nonprofit hospitals in the state accountable. It says if hospitals don’t start charging patients less, they could be stripped of their nonprofit status and the benefits that come with it.

“This isn’t about hospital systems, this is about people,” says bill co-author Rep. Ben Smaltz (R – Auburn).

“Hoosiers pay the ninth highest hospital rates in the entire country, and we have to take action to soften that financial blow,” continues Smaltz.

Essentially, the bill gives Indiana’s five big nonprofit hospitals an ultimatum—lower prices or pay up.

“If a hospital charges more than 2.65 times than what Medicare would pay for a service, so 265% of Medicare or more, hospitals will begin paying a penalty on all that overage,” says Matt Bell with Hoosiers for Affordable Healthcare.

Bell says this is a change he’s been waiting to see.

“How can we have some of the highest prices in the country in a state where cost of living is about 8% below the national average?” Bell says.

The proposed cuts for each nonprofit are as follows:

Ascension St. Vincent: Reduce prices by 40.5%
Community Health Network: Reduce prices by 34%
Deaconess Health System: Reduce prices by 23%
Franciscan Health: Reduce prices by 30%
IU Health: Reduce prices by 40.6%
Parkview Health: Reduce prices by 40.8%

But the bill’s target on these hospitals doesn’t end there.

“It has a trigger point for nonprofit hospitals to lose their non-profit status if they charge three times what Medicare rates pay,” says Smaltz.

That means they would lose the benefits that come along with being a nonprofit like not having to pay property taxes.

“Specifically in Allen County, if Parkview were to pay their property taxes, it would mean 14 million dollars and that’s not new money. That’s money that’s being paid by every homeowner, business and farm now,” Smaltz says.

Parkview Health released a statement reacting to the bill:

“We will continue to work with the Indiana General Assembly to evaluate the impact of this bill in its entirety. We are concerned by components of this bill that resemble price caps and rate setting, given these are not proven to reduce costs and will impede access to care and health care quality. Parkview remains committed to a multi-year strategy to reduce the total cost of care for Hoosiers by more than $1 billion, and we continue to develop innovative strategies for affordable care that do not compromise quality or safety.

We are also focused on a secondary component of this bill – the hospital assessment fee – which would increase Medicaid reimbursement to the state of Indiana and Indiana hospitals that have paid the hospital assessment fee to the state. Nearly one in five of our patients receives healthcare coverage through Medicaid. As a non-profit, Parkview provides more than $100 million per year in uncompensated Medicaid care.”

We also reached out to IU Health, which referred us to the Indiana Hospital Association. The group sent a statement saying:

“While we still have underlying concerns with House Bill 1004, we appreciate the constructive conversations we’ve had with Rep. Carbaugh and believe the bill is moving in the right direction. We look forward to continuing this important work as we head into the second half of the legislative session.”

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