Matt Doyle, Methodist Hospitals president and CEO, told the Senate Committee on Health and Provider Services Wednesday a 2020 federal law change to how so-called "safety net" hospitals are funded has Methodist facing an "insurmountable" financial obstacle that if not overcome will lead to "a significant closure or reduction of services." Times file photo
The leader of Northwest Indiana's Methodist Hospitals is warning Hoosier lawmakers that significant service cuts may be ahead absent a prompt infusion of state funding or a change to federal law.
Matt Doyle, Methodist Hospitals president and CEO, told the Senate Committee on Health and Provider Services on Wednesday that a federal law change to how so-called "safety net" hospitals are funded has Methodist facing an "insurmountable" financial obstacle that if not overcome will lead to "a significant closure or reduction of services."
Doyle did not identify any specific cuts during his presentation at the Statehouse. Methodist operates hospital campuses in Gary and Merrillville; immediate care centers in Crown Point, Merrillville, Schererville and Valparaiso; and specialty clinics across Lake County.
He explained Methodist is looking at a $16 million loss in federal aid under the new Disproportionate Share Hospital (DSH) limits set to take effect in October 2024.
According to the U.S. Centers for Medicare and Medicaid Services, DSH limits previously were based on all payments received by an eligible hospital, including Medicare, other insurers and cost sharing.
The law now specifies hospital-specific DSH limits are based only on costs and payments associated with Medicaid-eligible individuals where Medicaid is the primary payer, which Doyle said negatively impacts Methodist in particular because many of its low-income and elderly patients are "dual-eligible," with care paid both by Medicaid and Medicare.
Doyle said Methodist is working with U.S. Rep. Frank J. Mrvan, D-Highland, other Indiana members of Congress, along with similarly situated hospital leaders and federal lawmakers across the country, to try to revise the DSH payment system sooner rather than later.
However, he said that if the federal government drags its feet, or declines to make the change, Methodist will have no choice but to reduce or cease some of its operations — a potentially dire outcome for Lake County following the recent closure of the Franciscan Health hospital in downtown Hammond.
To avert that potential crisis, state Sen. Eddie Melton, D-Gary, filed Senate Bill 433 appropriating $20 million in state funds to Northwest Indiana hospitals to offset DSH payment cuts.
The Senate Health Committee did not act on Melton's proposal prior to this week's deadline for committee action.
But state Sen. Ed Charbonneau, R-Valparaiso, the committee chairman and a former Methodist Hospitals president and CEO, pledged to partner with Melton to see what kinds of funding are available when the proposed two-year state budget in House Bill 1001 is taken up in March by the Senate Appropriations Committee, on which they both sit.
"We will continue to work on this," Melton said. "This is a short-term issue, and I hope Congress will fix it in the future. But without help right now, I feel the bottom may fall out for Indiana hospitals."
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