The statutorily required direct-to-employer health care arrangements offered by five Indiana nonprofit hospital systems collectively cleared a 260% of Medicare pricing maximum last year, according to a report released Wednesday by the Indiana Department of Health.
The model allows employers to establish contracts directly with health care providers, forgoing traditional deals with insurance companies.
“When employers can access stable, affordable healthcare, they can invest more confidently in their workers and communities,” Gov. Mike Braun said in a news release Wednesday. “Direct-to-employer contracting is a smart, forward looking option that strengthens Indiana’s competitive edge, and I applaud the hospitals and employers embracing this model.”
Indiana lawmakers required the state’s nonprofit systems — Ascension Saint Vincent, Community Health Network, Franciscan Health, Indiana University Health and Parkview Health Network — to offer such direct-to-employer arrangements beginning Sept. 1, 2025.
That year’s House Enrolled Act 1004 also specified that the arrangements be at or below 260% of full Medicare pricing. The benchmark is calculated by taking the sum of inpatient and outpatient facility prices, expressed as a percentage of full Medicare.
“Full” Medicare includes the hospital-specific payments Medicare provides for inpatient services.
All five systems came in under the 260% mark for 2025 in the report.
“This year’s review demonstrates that Indiana hospitals are stepping up to provide employers with affordable, predictable healthcare options,” Health and Human Services Secretary Gloria Sachdev said. “Direct-to-employer contracts are an important tool for controlling costs while maintaining access to high quality care. We encourage businesses statewide to take full advantage of these solutions.”
Ascension Saint Vincent reported total performance of 171% of Medicare plan performance — the lowest of the five — although it had to submit supplemental data for six plans for IDOH to successfully validate them.
“Through direct employer arrangements, we partner with organizations across Indiana, from small employers to large corporations, schools, public safety agencies and local governments, to improve affordability and deliver high-value care,” CEO Don King said. “Our Employer Solutions program, established in 2009, serves more than 75 businesses, 125 public schools and over 300 public safety agencies, and we are proud to support employers across the state.”
Some individual locations were above the 260% benchmark, including the Jennings, Randolph and Williamsport facilities, according to the supplemental data appended to the IDOH review.
Community Health came in second at 190% of Medicare, followed by Parkview Health at 203% and Franciscan Health at 206%.
IU Health reported the highest prices, at 250% of Medicare, but was still 10 percentage points below the benchmark.
Indiana Hospital Association President Scott B. Tittle applauded members for their “innovative, market-based approaches.”
“By working more directly with hospitals or targeted networks to cut out unnecessary middleman, employers can improve health outcomes of their employees, reduce administrative complexity, and create more predictable health care spending,” he said.
“As the state’s review shows, hospitals are more than delivering on competitive, transparent pricing that aligns with employers’ needs, and IHA looks forward to the ongoing growth of these models in the future,” Tittle added.
The report comes as Indiana hospitals attempt to address widespread criticism — including from state leaders — over high prices.
The Indiana Chamber of Commerce called the results “encouraging,” also backing further expansion of direct-to-employer options.
However, implementation is key, according to the American Medical Association, which has created a model checklist for physicians considering going the direct route.