Indiana Governor’s Executive Order Targets Nonprofit Hospitals
I told you about a week or ten days ago that the annual 12-month nonprofit hunting season is underway. In Indiana, there is a bill pending that would revoke nonprofit status for hospitals that charge more than the 200% of the Medicare reimbursement rate. The nonprofit hospital community is understandably aghast at the proposal. Here is an excerpt from Inside Indiana Business:
Opponents of the bill said such a measure would punish nonprofit hospitals for even a single case of prices exceeding the requirement and that it would financially harm hospitals. At stake, critics said, is the ability of these Hoosier hospitals to stay financially viable and to provide the community benefit and charity care to those in need. “For this bill, you can have 1,000 charges under 200% of Medicare, but if you had only one charge above 200% of Medicare, you lose your tax exemption,” Tim Kennedy, general counsel for the Indiana Hospital Association, told the House Public Health Committee. “Apparently you lose it forever, because there’s nothing in the document here that suggests that there’s a way to appeal it or to renew it.”
Representatives from two Indiana hospitals—Baptist Health Floyd in New Albany and Goshen Health in Goshen—spoke in opposition to the bill. “My hospital (at) the beginning of last year was 236 beds. I just added 32 more beds, and it still is not enough,” said Mike Schroyer, president of Baptist Health Floyd. “I’m overflowing, because we have more and more people seeking our care that I’m running a negative operating margin right now, and by studies and data that I count we’re one of the lowest cost hospitals in the state.” Randy Christophel, CEO of Goshen Health, said 200% of Medicare reimbursement is not enough to cover hospital costs.
I’m not sure that Indiana isn’t just blowing smoke about this because the same day the bill was introduced, the Governor signed Executive Order 25-22 (it must be executive order season, too) directing the Secretary of Health Family Services to investigate every nonprofit hospital in the state to determine whether those hospitals provide at least as much in charity care as the value of their tax benefits. The order even references the KFF study we blogged about some time ago. That report is not good news for nonprofit hospitals, I’ll tell you that much. The Secretary is to submit a report by November 30. And if the Secretary thinks the nonprofit hospitals are not doing enough she is instructed to propose legislation to fix it all.
darryll k. jones