Indiana: The Surprise Hospital Fee You May Get Just for Seeing a Doctor

Date: February 01, 2023

In Indiana, like many other states, a core component of our economy are the jobs created by small businesses. There are nearly 500,000 small businesses in Indiana that employ more than 1.2 million Hoosiers. Yet many small employers struggle to find affordable healthcare benefit packages for their employees.

Twenty years ago, almost half of our nation’s small businesses offered health insurance to their employees. When the Affordable Care Act (ACA) passed in 2010, that number had fallen to just under 40%. Today, it stands at just 31%. The high cost of health insurance is driving small employers from offering this important benefit and hurting the ability of business owners to obtain coverage.

To no one’s surprise, one of the biggest operating expenses for any business is paying for the healthcare of their employees. Indiana’s overwhelmingly high healthcare costs are driving up health insurance premiums for small businesses and consumers while Indiana’s big system hospital profit margins are 4-5 times higher than the national margins.

A recent study from the Rand Corporation comparing costs of healthcare across 49 states found that Indiana’s hospital facility fees are the 5th highest in the country. Indiana State Senate President Pro Tempore Rod Bray and Speaker Todd Huston have called upon Indiana’s hospitals to reduce prices to the national average by 2025. In a letter they wrote to the CEOs of the state’s 20 largest hospital systems, Bray and Huston put them on notice that they must rein in their costs, or the Indiana legislature may do it for them. That was not a false threat.

Senate Bill 6, currently being considered by the Indiana General Assembly, and authored by State Senator Ed Charbonneau and co-authored by State Senator Justin Busch, provides a crucial step toward restoring affordable healthcare by addressing one of the most egregious practices driving up Indiana’s healthcare costs: dishonest billing.

Dishonest billing occurs when hospitals reclassify a patient’s off-campus visit as a “hospital-based service.” It is nothing more than a revenue-generating tactic leveraged by large hospital systems to drive up healthcare costs and increases their profit margins. On average, care classified as “delivered in a hospital” costs 300% more than the same care delivered in an office-based setting.

The current loophole in the law allows hospitals to take advantage of patients who receive care at a doctor’s office by billing them the higher pricing rates charged for care provided on the hospital campuses. This deceptive practice allows hospitals to charge a facility fee for services provided by any healthcare provider it employs and at any facility it owns, even if the patient never sets foot in the hospital.

Related Content: Small Business News | Indiana

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