Gov. Mike Pence announced Wednesday he was undoing a series of Medicaid rate cuts that Indiana made while weathering the recession.
The state plans to spend $37 million more each year reimbursing providers. A Pence spokeswoman said Wednesday the increase would amount to 2 percent more for hospitals, nursing facilities, home health and immediate care providers. Cuts in how much the state pays for dental, vision, medical transportation and other areas will be fully restored.
The Family and Social Services Administration cut the payments to Indiana hospitals in 2010 as the state struggled through the recession.
"A healthy Indiana is a strong Indiana," Pence said in a statement. "Thanks to the state's solid fiscal condition, we are able to increase the reimbursement rates, and we encourage providers to make investments that will improve the quality of care for Medicaid recipients and all Hoosiers."
State lawmakers paid for the increased rates in their recently passed, $30 billion biennial budget.
Indiana Hospital Association President Douglas Leonard opposed the 2010 cuts at the time and praised Wednesday's announcement in a statement.
"This decision is very important for our hospitals — it provides a more solid financial footing at this critical time given continued federal Medicare cuts," he said.