No fix in sight for reduced Indiana Medicaid payments to out-of-state children’s hospitals

Hoosier lawmakers appear no closer to resolving a hospital payment issue triggered when Indiana children covered by Medicaid receive trauma or neonatal emergency care from health providers located in another state.

In short, Indiana Medicaid pays out-of-state hospitals significantly less to care for Hoosier children compared to the rates it pays Riley Hospital for Children in Indianapolis for the exact same services.

Dr. John Cunningham, physician-in-chief at the University of Chicago’s Comer Children’s Hospital, told the General Assembly’s Interim Study Committee on Fiscal Policy Thursday that the difference amounted to more than $4 million at his hospital just last year.

He said nearly all Hoosier children treated at Comer hail from Northwest Indiana, since the Chicago hospital is just eight miles from the state line and getting to Riley requires a three-hour drive.

Cunningham said Comer has no plans to close its doors to Region children. But the hospital also struggles to cover its costs due to the low reimbursement rates Indiana Medicaid pays out-of-state hospitals, he said.

Both Cunningham and Dr. Stewart Goldman, division head at Lurie Children’s Hospital of Chicago, said their facilities are willing to pay Indiana’s Hospital Assessment Fee that would entitle them to receive the Medicaid rates that Indiana pays in-state hospitals.

However, current law does not permit out-of-state hospitals to pay the fee and receive the higher rates.

The study committee acknowledged the doctors’ concerns, but questioned whether the law should be changed to accommodate just one or two Chicago children’s hospitals, when Hoosier Medicaid members of all ages routinely receive health services in Illinois, Michigan, Ohio and Kentucky.

The panel will decide by November whether to recommend any policy changes for the 2020 General Assembly to consider enacting when it convenes its 10-week session in January.

Earlier this year, the Indiana House approved legislation that would have established a pilot full-payment program just at Comer Children’s Hospital.

However, it faltered in the Senate due to concerns about the need to treat payments to all out-of-state hospitals equally.