Indiana Gov. Mike Braun signed a bill that could revoke the nonprofit status of the state’s largest health systems if their aggregate inpatient and outpatient charges exceed the state average, the Indianapolis Business Journal reported May 6.
Four things to know:
1. While earlier bill versions relied on percentages of Medicare reimbursement as a benchmark, the version signed into law uses Indiana’s own average prices as the standard, according to the report. Beginning in 2029, hospitals that exceed the state average will lose their nonprofit designation but can regain it by returning to compliance.
2. The new law affects health systems with $2 billion or more in net patient service revenue. Five systems fall into that category:
- Ascension St. Vincent (Indianapolis)
- Community Health Network (Indianapolis)
- Franciscan Health (Mishawaka)
- Indiana University Health (Indianapolis)
- Parkview Health (Fort Wayne)
3. The Indiana Office of Management and Budget must conduct a study of hospital prices from 2023–24 and report statewide averages as a percentage of Medicare reimbursement by June 30, 2026.
4. Nonprofit hospitals are required to submit their full IRS Schedule H (Form 990) by Oct. 1 each year. Failure to comply will result in a $10,000 per-day fine. The law also mandates greater financial and plan transparency from insurers and third-party administrators.
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