Senate committee advances bill to cap some hospital facility fees, redesign Medicaid assessment

House Bill 1004, legislation from Rep. (last name) Carball aimed at lowering health care costs in Indiana, advanced from the Senate Health Committee on a 10-1 vote after several hours of testimony from hospitals, business groups, patient advocates and rural providers.

Representative Carball opened testimony saying Indiana’s hospital prices are high and described a set of measures in HB1004 intended to reduce commercial prices and increase federal Medicaid matching dollars. “According to the latest RAND study we have the ninth highest cost hospitals in the country,” the bill author said, outlining three main elements: (1) a phased cap and excise tax on facility fees above a percentage of Medicare, (2) changes to nonprofit reporting on community benefit, and (3) redesign of the hospital assessment (the “half”) and a new managed-care assessment to increase federal Medicaid matching funds.

Why it matters: supporters said the bill would constrain what they described as outsized hospital prices that increase premiums and out-of-pocket costs for employers and families. Opponents said the measure could reduce hospital revenues needed to maintain services, especially in rural areas where many hospitals already operate at a loss.

Key provisions described in testimony

- Facility-fee cap and excise tax: The bill would phase in a cap on facility fees tied to a multiplier of Medicare. Testimony specified a 265% of Medicare threshold for the facility fee with an excise tax on amounts above that level: 33% of the excess in 2026, 66% in 2027 and…