The Indiana bill would fine hospitals that exceed the price cap

INDIANAPOLIS — Indiana lawmakers say one of their top priorities in this session is cutting healthcare costs, and they have proposed legislation that would fine hospitals if they exceed new price limits.

Indiana lawmakers say Hoosiers face significantly higher healthcare costs compared to the national average.

“The average hospital rate in Indiana is 329% of federal Medicare rates, while the national average is 260% of federal Medicare rates,” said state Rep. Donna Schaibley (R-Carmel), who is trying to get it try to lower these prices.

Schaibley introduced House Bill 1004, which aims to increase competition among providers.

Her bill would ban certain non-profit hospitals from forcing doctors to sign non-compete employment contracts. And it would give a $10,000 tax credit to doctors who have an interest in their practice rather than working for a hospital system.

“Supporting independent physicians is not only an important element of accessibility, but also a way to reduce costs in Indiana,” said Matt Bell, who helps lead Hoosiers for Affordable Healthcare.

The bill would also require nonprofit hospitals to submit reports to the state on rates and receipts. And it puts a cap on some healthcare spending.

If a nonprofit hospital charges more than the national average fee, or 260% of the state Medicare reimbursement rate, the hospital would face fines. Critically accessible and district-owned hospitals would be exempt.

“I think after about four years, we should expect this legislation to potentially lower prices by about 15%,” said Mike Hicks, an economics professor at Ball State University.

But several hospital leaders say they have concerns.

Bryan Mills, president and CEO of the Community Health Network, argued that the fees hospitals charge are not entirely under their control.

“Drugs, devices, different therapies that we do — we don’t set those prices,” Mills told lawmakers.

Several hospital officials told the House Public Health Committee on Tuesday that they want to work with lawmakers to find other solutions.

Mike Schroyer, president of Baptist Health Floyd in New Albany, argued that many hospitals could not afford these policy changes.

“A negative-margin hospital doesn’t have more than $30 million,” Schroyer said.

Lawmakers did not vote on the bill in committee Tuesday, but plan to do so next week.