Indiana Providers Will Get Small Medicaid Bump

Indiana's providers will get a minor bump in Medicaid rates starting in January.

The planned rate increase, about 2% for hospitals, nursing facilities home healthcare providers, will partially erase a 2010 cut in rates made due to state government belt-tightening. Dentists and optometrists will have the rate cut completely erased.

Altogether, about $37 million in payments will be restored. Gov. Mike Pence credited the restoration of payments to a healthier state economy.

“Thanks to the state’s solid fiscal condition, we are able to increase the reimbursement rates, and we encourage providers to make investments that will improve the quality of care for Medicaid recipients and all Hoosiers,” Pence said.

The move was hailed by the Indiana Hospital Association, whose members have been under financial pressure caring for Medicaid enrollees and other low-income patients.

“This decision is very important for our hospitals—it provides a more solid financial footing at this critical time given continued federal Medicare cuts,” said IHA President Doug Leonard. “This is even more significant considering hospitals in other states are facing even further Medicaid cuts while Indiana is able to reverse them.”

Indiana has about 1.1 million Medicaid recipients. The state has yet to commit to further expanding the program under the Affordable Care Act, which would provide coverage to another 400,000 of the state's residents.

Pence, a Republican, was one of the most conservative members of the U.S. House of Representatives, where he served for more than a decade until being elected governor last November. The Indiana Legislature is also controlled by Republicans, who have been hostile to expanding Medicaid.

Pence's administration has been trying to obtain a waiver that would allow those who would qualify for Medicaid expansion to receive care in a tight network of hospitals as part of the Healthy Indiana health plan. The IHA has projected that accepting federal funds to expand Medicaid would receive $10.5 billion through 2020 and create 30,000 jobs during that same period.