STATEHOUSE (Feb. 11, 2025) – State Rep. Martin Carbaugh (R-Fort Wayne) has authored a House Republican priority bill to combat the rise in health care costs by ensuring nonprofit hospitals act as nonprofit entities focused on delivering affordable health care to Hoosiers. It passed out of the House Public Health Committee today.
Statistics show that among the "big six" nonprofit hospital networks in Indiana, profit margins since 2017 ranged from 9-17 percent while the national average was 3 percent. Carbaugh said his bill addresses excessive pricing by nonprofit hospitals and adds greater transparency measures to help reduce costs for Hoosiers.
House Bill 1004 would impose a penalty on nonprofit hospitals if they charge a facility fee that exceeds 265 percent of the Medicare facility fee. It would also require that nonprofit hospitals charge no more than 300 percent of the Medicare reimbursement rate for services in order to maintain their nonprofit status, with the intention that these hospitals remain focused on the community's benefit rather than their bottom line.
"Health care costs remain high in Indiana and studies show that some of the hospitals driving this issue are large, nonprofit hospitals," Carbaugh said. "House Bill 1004 will put stronger parameters in place to hold these hospitals accountable and save Hoosiers real money on their health care costs."
Carbaugh said the excise tax will be phased in over three years.
The proposed legislation states that nonprofit hospitals, excluding rural emergency hospitals, critical access hospitals and county hospitals, would be required to submit a report to the Indiana Department of Health annually that includes aggregate data on all billed items and services, along with a comparison of the charges to Medicare reimbursement rates to ensure their compliance. Any hospitals that are found charging more than 300 percent of the Medicare reimbursement rate for a service or item would lose their nonprofit status.
Under the legislation, nonprofit hospitals would also be subject to annual audits by the Indiana Department of Insurance. Carbaugh said by Aug. 1 of each year, nonprofit hospitals would be required to provide the Health Care Cost Oversight Task Force necessary tax documents from the previous fiscal year and make them available for publication on the Indiana General Assembly's website.
House Bill 1004 will now go to the full House for further consideration. For more information, visit iga.in.gov.
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State Rep. Martin Carbaugh (R-Fort Wayne) represents House District 81,
which includes a portion of Allen County.
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