Nonprofit hospitals targeted for high prices in bill passing the House
Fort Wayne Rep. Martin Carbaugh, right, takes notes while his colleague Rep. Ethan Manning, of Logansport, comments on his bill. (Whitney Downard/Indiana Capital Chronicle)
A priority bill for House Republicans that would penalize nonprofit hospitals charging high prices overcame opposition from two GOP caucus members and left the House on a 68-26 vote Thursday.
As introduced, House Bill 1004 would impact nonprofit hospitals charging more than 200% of Medicare prices — reversing their nonprofit status in the state and charging them taxes like their for-profit peers.
The amended version of the bill bumped that percentage up to 300%. Hospitals charging more than 265% of Medicare will be penalized but retain their nonprofit status.
'The most expensive hospitals that we have in the state have nonprofit status,' said author Rep. Martin Carbaugh, R-Fort Wayne. 'We see charges in excess of 400% of Medicare in some cases.'
Hospitals take heat during dueling health care hearings
The motion follows an interim study concluding that prices at six nonprofit health systems cost less than 285% of Medicare but varied widely depending on the service.
But Carbaugh's proposal didn't have universal support in his GOP caucus. Rep. Ethan Manning warned about the impact on a Logansport area hospital that could be sold to a nonprofit system 'in months.'
'I am glad that a nonprofit hospital system has some extra money so we can keep health care in my district. This is the reality of rural health care today,' Manning said. 'In some cases, (nonprofit hospitals) are the only hospitals we have.'
He added that he disagreed with the 'philosophy' of setting price caps.
Manning and Cindy Ledbetter, R-Newburgh, opposed the measure along with almost all the Democrats.
Democrats also pointed to the community benefit provided by hospitals.
'Instead of these punitive measures, let's work together … to find solutions that address health care costs without compromising the quality and accessibility of care,' urged Rep. Maureen Bauer, D-South Bend. '… we must do more to invest in competitive care and innovative health care delivery models that will help us achieve our shared goals.'
The underlying bill would also significantly change how the state charges its provider tax on hospitals to fund the Healthy Indiana Plan, or HIP. Though the federal government pays for 90% of the program, the state uses a hospital assessment fee and cigarette tax to fund the remaining 10%.
According to Carbaugh, the state isn't 'maximizing those dollars,' and his bill proposes recalculating that tax — which, in turn, impacts the reimbursement rate hospitals receive from the federal government.
Lastly, the bill would also impose a provider tax on managed care entities, similar to 20 other states.
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