Indiana hospitals may face 'insurmountable' financial loss after federal policy change, CEO says

The change in federal policy for calculating Disproportionate Share Hospital limits will cost some hospitals millions of dollars and could accelerate closures, according to Matt Doyle, president and CEO of Merrillville, Ind.-based Methodist Hospitals.

The Times of Northwest Indiana reported Mr. Doyle spoke to the state's Senate committee on health and provider services Feb. 22 about how the federal rule change could affect safety net hospitals. He said Methodist will lose $16 million in federal funds when the new policy takes effect October 2024, which he warned could lead to "insurmountable" financial loss.

CMS previously based DSH funding amounts on payments the agency received from hospitals, but beginning next year, the limits will be based on costs and payments associated with just Medicaid-eligible patients if Medicaid is the primary payer. Medicare beneficiaries will no longer factor in.

Mr. Doyle said the change could force "a significant closure or reduction of services," which would challenge access to care in the area.

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