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HHC reports loss of state HCI appropriation; finance staff project multi‑million fund‑balance decrease
Summary
CFO James Simpson reported a loss of HCI appropriations that reduced revenue and is projected to lower the fund balance; Eskenazi Health leaders described operational responses and federal advocacy work.
Health and Hospital Corporation interim CFO James Simpson told trustees that HHC’s May financial statements reflect the loss of an HCI (state) appropriation for 2025. Simpson said the corporation received a single payment of about $9.5 million in April but will not receive additional payments that would have brought the total to approximately $38 million. He reported a year-to-date decrease in fund balance of about $7.4 million through May 31 and projected a year-end fund-balance decrease of about $25.7 million (he noted an alternate projection of about $28.5 million when factoring certain payments).
Simpson said HHC is keeping operational transfers to the hospital in place for the remainder of 2025 and is continuing work on the 2026 budget; staff will present an initial 2026 budget dashboard at the audit, finance and compliance committee in July. He told trustees HHC will continue to monitor revenues and control expenses to mitigate the impact on operations.
Eskenazi Health leadership described operational steps and federal advocacy efforts tied to the broader policy environment. Eskenazi Health CEO Paul Babcock thanked the board for approving the refinancing resolutions and reminded trustees of upcoming milestones, including an IMS (ambulance facility) groundbreaking on July 24 and targeted substantial completion of a facility in November 2026. Eskenazi Health CEO Dr. Gutierrez (Eskenazi Health) said clinical and revenue-cycle teams have been working to manage expenses and maximize collections; he reported that, as of May, Eskenazi was outperforming its budget by about $2.2 million year to date. Dr. Gutierrez also briefed trustees on pending federal reconciliation legislation that, in versions under consideration in Congress, could reduce provider-tax and directed-payment programs used by states to support Medicaid financing; he said HHC and partners are advocating for protections for “high-needs” hospitals.
Trustees were told that staff will present more detailed budget materials in July and during the city-council budget cycle. The board accepted the financial reports as presented and directed staff to continue monitoring the budget and return with additional details as part of the 2026 budget process.
