While the federal “big beautiful bill” will significantly impact revenue at the Sullivan County Community Hospital, the hospital is not at immediate risk of closing, Michelle Franklin, the hospital’s chief executive officer, said this week.
Around noon Tuesday, the Senate passed the sweeping domestic policy bill — which had undergone revisions overnight. The bill provides tax breaks and spending cuts.
Vice President JD Vance broke a 50-50 tie to push it over the top, according to Associated Press.
News reports this week indicated that a dozen rural hospitals in Indiana faced greater risk of either stopping some services, converting or closing. The Sullivan hospital was on the list, as was Ascension St. Vincent Clay in Clay County.
Four senators had sent a letter to President Trump, noting that 338 hospitals nationwide would be at risk. They received their information from the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
On Monday, Franklin, Sullivan County Community Hospital’s CEO, said she had received a number of calls from employees and others “wondering what is going on.”
Inclusion on the list “doesn’t necessarily mean we are in immediate jeopardy of closure or that we’re in any kind of current risk of closing,” she said.
“But what it does mean is that if the bill passed and we had less Hoosiers enrolled in HIP (Healthy Indiana Plan), that our hospital alone could see maybe $3.4 million or $3.5 million less in revenue than we have today.” That would be less revenue annually, Franklin said Monday.
“That would obviously cause us some operational issues and we would have to examine what we were spending our money on and perhaps make some difficult decisions,” she said.
On Tuesday, she pointed out that Indiana Medicaid “currently only reimburses us 57 cents on the dollar for every Medicaid patient seen and these rates have not been increased in over 30 years.”
The bill is now headed back to the House, where Speaker Mike Johnson had warned senators not to deviate too far from what the chamber had already approved. But the Senate did make changes, particularly to Medicaid, risking more problems as they race to finish by Trump’s Fourth of July deadline, the Associated Press reported.
Said Franklin, “We hope that there is some sort of revision of the language that deals with Medicaid cuts that will not hurt hospitals in general — it’s not just our county hospital that would face tremendous problems with that cut.”
While the legislation under consideration was “troublesome,” Franklin emphasized, “We are not closing. We’re in the middle of expansion.”
Efforts to obtain comment from Ascension St. Vincent Clay were not successful.
Meanwhile, two state groups affiliated with rural health and Indiana hospitals warned about the potential negative impacts of the legislation.
Dan Hardesty, director of government affairs for the Terre Haute based Indiana Rural Health Association, said the list of 338 hospitals at risk comes from the Sheps Research Center that looks at hospitals with negative margins and serving a high population of Medicaid patients.
“Even if the reconciliation bill passes this week, many of the Medicaid provisions don’t kick in for a couple of years. New requirements like work requirements and eligibility checks will be administered by the states and those will take time to get ready. It’s not accurate to think that once this bill passes that everything changes overnight,” Hardesty said.
But Indiana has a number of rural hospitals that are operating at break-even or at a negative margin, meaning that any policy that restricts or changes revenue for rural hospitals must be implemented with caution, he said.
“Making drastic changes to rural hospitals finances without backfilling the loss with sufficient revenue can cause rural hospitals to limit services, look for partnerships with larger systems or close,” Hardesty said.
Overall, the potential impact of the reconciliation bill on rural hospitals is concerning, Hardesty said.
The Senate’s version would likely force Indiana to tighten eligibility requirements for Medicaid, shrinking the number of people on it. A smaller number of Hoosiers on Medicaid means higher uncompensated care for rural hospitals as people won’t have insurance, Hardesty said.
According to NPR, the Senate version that was passed moved to rein in what are known as provider taxes — a tax states have used to secure more federal matching dollars for Medicaid.
To alleviate lawmakers who said the change risked the collapse of many rural hospitals, the Senate ultimately included a new $50 billion fund to support rural hospitals nationwide. That program would begin in 2026 and funds would be spread out over five years.
In Hardesty’s estimation, “While it will help, that amount certainly will not cover the losses for rural hospitals” nationwide.
The Indiana Hospital Association also is “greatly concerned about the long-term impacts of the U.S. Senate’s proposed Medicaid cuts on all Indiana hospitals, including the phase down of the provider tax threshold, which would decrease Indiana’s Medicaid reimbursement over time and jeopardize access to care for Hoosier patients,” according to a statement.
“While we are not aware of any hospitals that are planning to close at this time, the financial strain hospitals are experiencing will only be exacerbated by future Medicaid cuts should the Senate version of the budget reconciliation bill pass into law,” said Steve Cooke, IHA spokesperson. “Hospitals may be forced to reduce services, consolidate, or close entirely, resulting in a loss of 24/7 care that patients and communities depend on.”
IHA urges Congress to safeguard the flexibility states have in designing sustainable Medicaid funding strategies and opposes any attempt to curtail the use of provider taxes, including lowering the provider tax threshold.
“IHA urges Congress to restore the House-passed language to protect access to care in our communities,” Cooke said.
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