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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowGov. Mike Braun on Tuesday signed into law a bill that threatens to strip Indiana’s largest hospital systems of their state nonprofit status if their aggregate charges exceed state average prices.
House Bill 1004, authored by Rep. Martin Carbaugh, R-Fort Wayne, took a circuitous path through the General Assembly, with its original focus on affecting hospital prices altered and its scope widening to include other health care and insurance matters.
The bill’s core pricing scrutiny targets hospital systems with $2 billion or more in net patient service revenue in the state. In Indiana, that affects a group often called the “Big Five”—Indiana University Health, Ascension St. Vincent, Community Health Network, Franciscan Health and Parkview Health.
Supporters of HB 1004 pointed to a recurring study updated in December by Los Angeles-based research group Rand Corp. that found Indiana had the ninth-highest hospital costs in the nation.
HB 1004 uses state averages to determine whether prices are excessive. Previous versions of the bill used percentages of Medicare reimbursement as national benchmarks. Starting in 2029, a hospital system will lose its state nonprofit status if its inpatient and outpatient aggregate average prices were not equal to or less than the state average, although the system could re-establish nonprofit status by returning to compliance.
The bill also calls for the Indiana Office of Management and Budget to—before June 30, 2026—conduct a study of inpatient and outpatient hospital prices from 2023-24 to determine statewide average prices, to be reported as a percentage of Medicare reimbursement.
The new law also requires nonprofit hospitals to by October 1 of each year provide the state with its entire Internal Revenue Service Schedule H (Form 990), which provides information on the hospital’s operation and community benefit.
Nonprofit hospitals face a fine of $10,000 a day if the forms are late. The legislation also has requirements for health insurers and third-party administrators to provide additional plan and financial information.
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