Gov. Braun Signs Bill Regulating Non-Profit Hospital Prices Into Law
FORT WAYNE, Ind. (WANE) — In January, when State Rep. Martin Carbaugh (R) of Fort Wayne
talked about his bill to lower prices
at Indiana’s not-for-profit hospitals, he warned, “You’re either for-profit or not-for-profit. If you’re not-for-profit, let’s act like it.”
After numerous revisions, HB 1004 was signed into law by Governor Mike Braun last Tuesday.
The recent legislation mandates that Indiana’s Office of Management and Budget must establish the mean cost of all Indiana hospital facility charges by June 2026. The state’s five major non-profit healthcare providers, such as Parkview Health and IU Health, will be required to align with this average fee structure by 2029; otherwise, they risk losing their non-profit standing.
“I believe this version takes a more cautious approach compared to the initial bill, yet remains effective,” Carbaugh stated to WANE 15 on Thursday.
Carbaugh mentioned that his initial suggestion gained the interest of the hospitals due to wording indicating they couldn’t exceed 200% of Medicare reimbursement rates without jeopardizing their non-profit standing.
This sparked intense debates among legislators at the state capitol.
“We had a lot of great conversations,” said Carbaguh, “and I don’t want to misrepresent that they were happy with the end result, but it certainly was a better result for them than the original bill.”
Carbaugh rejected the idea that the legislation might destabilize Indiana hospitals, arguing that these institutions must continue serving the public during various economic situations. He contended that hospitals have the option to select any pricing strategy and operate as profit-driven entities, similar to many others across the state.
Carbaugh came across a statement from a former hospital administrator from beyond northeastern Indiana who admitted running their nonprofit organization like a for-profit entity “since they could.”
Scott B. Tittle, the president of the Indiana Hospital Association, stated that the recent legislation fails to account for the unpredictability of increasing financial burdens like duties, inflation, and various critical economic elements.
“We’re eager to keep working alongside lawmakers and Governor Braun’s administration to develop future solutions that effectively reduce costs while still ensuring accessibility for Indiana patients,” he told WANE 15.
Dr. Jason Row, who serves as the chief value transformation officer at Parkview Health, also provided his insights:
Parkview Health sincerely thanks the numerous legislators who understand our work through the communities we serve and those who voiced their support for nonprofit hospitals during this legislative session.
Regrettably, although HB 1004’s stipulations will impose substantial bureaucratic challenges on every hospital in Indiana, they will disproportionately affect five not-for-profit healthcare organizations. Due to unclear aspects of the legislation—introducing unusual intrusions into the private sector—we cannot predict its potential effects.
costs or
access to top-notch healthcare
Indiana’s
rural communities.
Despite heightened governmental oversight, Parkview Health continues to advocate for market-driven approaches aimed at reducing overall healthcare costs. These efforts encompass talks with prominent commercial insurers to expand their current $1.1 billion savings initiative launched in 2020; introducing a novel employer-focused health program via Signature Care which guarantees businesses up to a quarter less expense than typical commercial coverage options, along with charges under the nationwide standard rate for hospitals; as well as developing additional budget-friendly medical facilities such as urgent cares.
clinics
and ambulatory surgery centers.
IU Health chose not to provide comments and suggested reaching out to the Indiana Hospital Association instead.
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