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Indiana HB 1004 Could Impact Nonprofit Hospitals

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Indiana SB 317 defeated after third reading

A pair of Indiana bills that would have impacted hospitals went two ways recently. Indiana House Bill 1004, which states that nonprofit hospitals whose facility fees are too high could lose their status and face an excise tax, was referred to the Senate. Indiana Senate Bill 317, which would have impacted the way hospitals handle charity care and payment plans was failed to pass the house by a vote of 23 to 26 and is unlikely to receive further consideration.

Indiana House Bill 1004

Indiana HB 1004, which was introduced in late January 2025, would give lawmakers the ability to revoke the nonprofit status from certain hospitals if they are found to have charged rates that are “in excess of 300% of the Medicare reimbursement rate at the time of charge.”

This law would exclude critical access hospitals from the excise tax statue and require any funds from the excise tax to be used with the Medicaid program and for developing the healthcare workforce that serves rural Indiana. Nonprofit hospitals are also required to provide the Department of Insurance a report including aggregate data on all billed services and items, along with a comparison of the charges for those services and items to the respective Medicare reimbursement rates.

Indiana HB 1004 was referred to the Senate on February 21, 2025.

Indiana Senate Bill 317

In January 2025, Indiana SB 317 was introduced in the Indiana Senate and a month later unanimously passed the Senate Committee on Health and Provider Services, albeit with several major changes. It was then defeated on February 20, 2025, in its third reading. Indiana SB 317 would have required all Indiana hospitals to give patients information about charitable assistance and payment plans. The bill stipulated a plan that must allow payments to be made over a period of at least two years, and the monthly payments could not exceed 10-percent of a patient’s monthly income.

One of the provisions that was deleted from the original bill would have required hospitals to provide good faith estimates to patients before services were received. Another deleted provision would have required hospitals to stop reporting medical debt to consumer reporting agencies.

Americollect will continue to monitor Indiana HB 1004, as well as others, to keep you informed of the state legislation that could affect your facility.

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