Gov. Braun signs non-profit hospital price bill into law

FORT WAYNE, Ind. (WANE) — In January, when State Rep. Martin Carbaugh (R) of Fort Wayne talked about his bill to lower prices at Indiana’s not-for-profit hospitals, he warned, “You’re either for-profit or not-for-profit. If you’re not-for-profit, let’s act like it.”

After numerous revisions, HB 1004 was signed into law by Governor Mike Braun last Tuesday.

The new law tells Indiana’s Office of Management and Budget to determine the average price of all Indiana hospital facility fees by June 2026. The five large not-for-profit hospital systems, which include Parkview Health and IU Health, would have until 2029 to reach that price average or lose their not-for-profit status.

“I think it’s a more measured approach than the original bill, but still effective,” Carbaugh told WANE 15 Thursday.

Carbaugh said his original proposal got the attention of the hospitals with language that said they could not charge more than 200% of Medicare reimbursement rates without risking their non-profit status.

That opened up some robust discussions between lawmakers and the statehouse.

“We had a lot of great conversations,” said Carbaguh, “and I don’t want to misrepresent that they were happy with the end result, but it certainly was a better result for them than the original bill.”

Carbaugh pushed back at the suggestion that the law could destabilize Indiana hospitals, which need to serve the public through all economic conditions, because they could choose any price point and become a for-profit entity, like numerous other hospitals in the state.

Carbaugh heard of a former hospital executive from outside northeast Indiana admit he had run his not-for-profit system as a for-profit “because we could.”

Indiana Hospital Association President Scott B. Tittle said the new law does not take into consideration the uncertainty of rising cost pressures such as tariffs, inflation, and other significant economic factors.

“We look 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,” he messaged WANE 15.

Dr. Jason Row, chief value transformation officer at Parkview Health, also weighed in:

Parkview Health greatly appreciates the many legislators who know us best from the communities we serve and who spoke in support of non-profit hospitals this session. 

Unfortunately, while the provisions of HB 1004 will create significant administrative burdens for all Indiana hospitals, it will ultimately unfairly target five non-profit health systems. Given ambiguity in the law, which creates unprecedented private market interventions, we are unable to say how it may impact costs or access to high-quality care in Indiana’s rural communities. 

Regardless of increased government regulations, Parkview Health remains dedicated to market-based solutions to lower the total cost of care. This includes negotiations with major commercial insurance companies to further extend our $1.1 billion savings plan started in 2020; launching a new direct-to-employer health plan through Signature Care that offers employers savings of 25% compared to commercial health plans, and hospital rates below the national average; and establishing more low-cost sites of care, like urgent care clinics and ambulatory surgery centers.

IU Health declined to comment and redirected WANE 15 to reach out to the Indiana Hospital Association.