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The Guardian
09-05-2025
- Health
- The Guardian
Indiana passes law threatening non-profit status of expensive hospitals
Indiana's governor, Mike Braun, has signed a landmark bill that would strip charity hospitals of their non-profit status if they continue to charge high prices. The legislation, the first of its kind in the United States, followed uproar across the state after a Guardian series in October that investigated how one major Indiana non-profit hospital system bought up its competition, then hiked its prices, leaving businesses and patients struggling to pay their medical costs. In the wake of the Guardian investigation, Braun, then the Republican gubernatorial candidate, and his Democratic rival both criticized the hospital system, Parkview Health, for its high prices, and lawmakers vowed to take action against the non-profit chain, which charged some of the highest prices in the country despite being based in Fort Wayne, Indiana, the US's most affordable metro area. Braun signed the legislation into law on Tuesday. It comes at a time of growing concern across the US about healthcare costs and medical debt. To implement the law, the Indiana office of management and budget will first study prices across the state and come up with a price benchmark for non-profit hospitals in consultation with the legislature, according to the bill's author, Martin Carbaugh, a Republican representative who represents a district that includes Fort Wayne. Non-profit hospitals will then have until 2029 to get their prices under that average, though Carbaugh hopes some will lower their prices before then as they negotiate with insurers. 'We'll start to see the downward pressure put on them right away,' he said. 'The hospitals know they can't just go for broke and raise costs, only to have to lower it again in 2029.' According to data compiled by Hoosiers for Affordable Healthcare, an Indiana advocacy group, the legislation could result in average price reductions as large as 40% for Parkview, and similarly sized cuts for other large state hospital systems. 'It's gonna be beneficial to everybody,' said Doug Allen, a small business owner who has struggled to keep up with Parkview's healthcare costs for his employees. 'Maybe people won't be hurting so bad. Maybe they won't think twice before coming to the hospital. Almost everybody around here is on a payment plan with Parkview. Everybody owes money to Parkview.' Parkview Health did not respond to requests for comment but has previously said it is committed to lowering healthcare costs. In a statement, the Indiana Hospital Association said it was 'concerned by the potential loss of non-profit status for hospitals based on meeting an unknown statewide average commercial price in the future. This does not take into consideration the uncertainty of rising cost pressures such as tariffs, inflation, and other significant economic factors that will further threaten the financial stability of Indiana's health care ecosystem.' The group added that it looks forward to 'continuing our work with legislators and Gov Braun's administration on future solutions that strike the right balance of lowering costs while maintaining access for Hoosier patients'. The US spends far more on healthcare than other large, wealthy countries, a trend that has been exacerbated by decades of hospital consolidation limiting competition in the healthcare sector. Carbaugh said he was aware of how high healthcare prices are across the country and said Indiana's legislation might be a model for other states too. 'It's great to be a leader,' he said. 'I'm happy to be part of leading that charge.'
Yahoo
25-04-2025
- Health
- Yahoo
Hospital ‘price caps' passes out of House, Senate for the last time
Rep. Martin Carbaugh, R-Fort Wayne, listens to bills in the House Chamber on April 24, 2025. (Whitney Downard/Indiana Capital Chronicle) Much of the compromise reached for House Enrolled Act 1004 mirrors what left the Senate earlier this month. Penalties for five nonprofit health systems exceeding 'price caps' have now been pushed off into 2029 — after the Office of Management and Budget identifies the 'average hospital rate' for certain inpatient and outpatient services. The final version retained a provision to strip nonprofit hospitals of their tax-exempt status under Indiana code as well as enhanced reporting metrics. 'Even with those changes, we are making meaningful, incremental changes to provide relief to our constituents,' said author Rep. Martin Carbaugh, R-Fort Wayne. Most House Democrats opposed the bill, citing concerns about what losing a nonprofit status could mean for a community. '(The) loss of nonprofit state versus a penalty will impact what benefits are provided to the community to keep Hoosiers healthier and prevent the unnecessary use of hospital services,' said Rep. Robin Shackleford, D-Indianapolis. A provision allowing the state to phase out the Healthy Indiana Plan, which covers low- and moderate-income Hoosiers, if federal funds are not allocated also gave her pause. 'There is nothing in this bill that ensures that patients will pay less for quality health care, but there is a lot of red tape,' she continued. 'And there is an increase in administration and labor fees, so we will be voting no.' Shackleford and 22 other lawmakers — including one Republican — voted against the bill in the House. For the first time, the state will also institute a Managed Care Assessment Fee, similar to the provider tax known as the Hospital Assessment Fee, which could reap a maximum $1.4 billion annually — though the rate would need to be negotiated with the federal government. Additionally, insurer negotiations with hospitals will be separated from Medicare Advantage deals — even if the insurer offers both. Combined with a reconfigured Hospital Assessment Fee that will leverage a larger federal reimbursement to health systems, Republicans said rural hospitals notched some wins. 'Two-thirds of Indiana nonprofit hospitals benefited more from the federal, state and local tax breaks than they invested back into their communities,' said Sen. Chris Garten, R-Charlestown. '… this bill is going to put more dollars into our rural systems all across the state.' But reliable opposing Sens. Liz Brown and Tyler Johnson — Republicans from Fort Wayne and Leo, respectively — shared their discontent with setting pricing standards for any industry. Both have ties to Parkview Health, one of the five systems named in the bill, which recently announced a deal to purchase a struggling hospital in Cass County that would have otherwise closed. 'If they lose their not-for-profit status, they lose their license. Which means they can't operate at all … they have to close their doors,' Brown said. She worried that, under such a situation, a for-profit chain would only buy certain facilities, leaving out the rural hospitals that depend on their nonprofit status. A bipartisan group of 13 senators opposed the bill compared with 37 supporting votes.
Yahoo
20-02-2025
- Health
- Yahoo
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. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
