Indy Standard

State Representative Ben Smaltz of Auburn has co-authored a bill aimed at addressing rising healthcare costs by ensuring nonprofit hospitals in Indiana operate with transparency and fair pricing. The bill, which is a priority for House Republicans, recently passed the full House of Representatives.

According to statistics, profit margins among the "big six" nonprofit hospital networks in Indiana have ranged from 9-17 percent since 2017, compared to a national average of 3 percent. Parkview Health reported an average margin of 11 percent between 2017 and 2021. Smaltz stated that his bill targets excessive pricing by these hospitals and introduces measures to increase transparency and reduce costs for residents.

House Bill 1004 proposes penalties for nonprofit hospitals charging facility fees exceeding 265 percent of Medicare rates. It also mandates that these hospitals charge no more than 300 percent of Medicare reimbursement rates to maintain their nonprofit status, emphasizing community benefit over profit.

"Nonprofit hospitals should be putting patient care above profit," said Smaltz. "That's why I co-authored legislation to take a stand against hospital price gouging and fight for all Hoosiers to have access to affordable health care."

The bill includes an excise tax on overcharging patients, phased in over three years. Nonprofit hospitals must submit annual reports comparing charges with Medicare rates to the Indiana Department of Health. Hospitals charging more than allowed could lose their nonprofit status but may regain it if they comply for at least 90 consecutive days.

Smaltz highlighted concerns about access to care following the phasing out of labor and delivery services at Parkview DeKalb and Parkview LaGrange in fall 2023. "The health of Hoosiers is not a profit line," he said.

Additionally, House Bill 1004 establishes a state-directed payment program for hospitals involving managed care assessment fees used solely for Medicaid services provided by the state. These fees are tiered based on net patient revenue or inpatient days.

Nonprofit hospitals would also undergo annual audits by the Indiana Department of Insurance under this legislation. By November each year, they must provide necessary tax documents from the previous fiscal year to the Health Care Cost Oversight Task Force.

The bill now moves to the Senate for further consideration.