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Indiana hospitals at 'breaking point' as new legislative panel prepares to examine Medicaid

By Brandon Smith

Posted September 27, 2023

Indiana Hospital Association President Brian Tabor said the state needs to "rebalance" its partnership with hospitals when it comes to funding. (FILE PHOTO: Justin Hicks / IPB News)

The Indiana Hospital Association said hospitals are at a financial “breaking point” as state lawmakers begin a deep dive into Medicaid funding.

The new state budget improved the Medicaid reimbursement rates for physicians this year. But IHA President Brian Tabor said hospitals now need more support from the state.

“As the burden on hospitals continues to grow, to fund our very low base rates that haven't been raised in 30 years, as we fund more and more people that are on the Healthy Indiana program,” Tabor said. “And so my concern is that we will not have hospitals and services for Medicaid patients.”

Tabor said the state could reduce a surtax it charges hospitals to help pay for Medicaid. The proposed House Republican budget did that earlier this year, but the final budget didn’t include any reduction, so it’s likely some lawmakers will still balk.

Tabor said Indiana should also explore what other states have done to leverage more federal funding for Medicaid.

“So, the state of Kentucky, for example, they have just raised their Medicaid rates for their hospitals over Medicare,” Tabor said. “So hospitals there now are actually getting more than a government payment.”

Tabor said he welcomes the new Medicaid Oversight Committee, which was created to do a deep dive into the program as lawmakers fret over increasing costs.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.