Recent proposed legislation and an executive order in Indiana would introduce new requirements for nonprofit hospitals and update the statutory definition of “community benefits” for hospitals.
On January 21, 2025, Indiana Governor Mike Braun issued an executive order directing the state Secretary of Health and Family Services to conduct an investigation and prepare a report analyzing the amount of charity care rendered by each nonprofit hospital in Indiana and comparing it to the “tax-exempt benefits enjoyed” by nonprofit hospitals in the state (“Executive Order”). The report is also directed to analyze “any practices of nonprofit hospitals operating in the State of Indiana that permit such hospitals to avoid providing charity care to the truly needy in their community.”
The stated goal of the Executive Order is to determine the State Department of Health’s authority to issue administrative rules or to otherwise “suggest statutory changes” that would require each nonprofit hospital operating in Indiana to “verify that their hospital or hospital system provided more charity care in a given tax year than the value of tax exemptions received.”
On the same day, a bill was introduced in the Indiana House of Representatives that would require “nonprofit hospitals” (as defined in the statute) to report annually on aggregate items and services billed and to provide a comparison of those charges with their “respective Medicare reimbursement rates.” (the “Bill”). If the hospital charges an amount for an item or service that exceeds 200% of the Medicare reimbursement rate, the hospital “forfeits its status as a nonprofit hospital.” The Bill would also revise the definition of “community benefits” such that nonprofit hospitals could only include, within such definition, services remaining unpaid after 180 days where the nonprofit hospital “received less than the Medicaid reimbursement rate for the service.”
A hearing of the House Public Health Committee was held on January 28, 2025, which saw testimony from the Department of Health and Family Services as well as the Indiana Hospital Association.
Hall Render will continue monitoring this issue on behalf of its nonprofit hospital clients in Indiana. If you have any questions or would like more information on this topic, please contact:
- Joel Swider at (317) 429-3638 or jswider@hallrender.com;
- Jeff Carmichael at (317) 977-1443 or jcarmichael@hallrender.com;
- Addison Bradford at (317) 977-1403 or abradford@hallrender.com;
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
