U.S. Sen. Jim Banks, R-Indiana, introduced federal legislation that aims to help Indiana hospital systems receive adequate Medicaid funding, including Methodist Hospitals in Northwest Indiana.
“Methodist is a true safety net hospital and 80% of our patients are covered by Medicaid/Medicare,” Matthew Doyle, president and CEO of Methodist Hospitals, said in a Wednesday news release. “Our mission, that has remained a constant through our 102 years, is to provide high quality health care to all those in need. The residents of Gary and Northwest Indiana deserve the same high quality health care as other Americans, and I appreciate Sen. Banks’ legislation that would help ensure they can continue to receive it.”
Banks’ legislation would help Indiana hospitals receive Medicaid Disproportionate Share Hospital funding, according to a Wednesday news release. Federal law requires state Medicaid programs to make payments to hospitals that serve a large number of Medicaid and uninsured patients, according to the program’s website.
A 2021 recalculation shortchanged Indiana, according to Banks’ news release. The legislation, which is called the “Save Our Safety-Net Hospitals Act of 2025,” also allows state Medicaid plans to use unspent money to increase the amount of a payment adjustment to a hospital during specific rate years.
The eligible rate years begin on or after Oct. 1, 2021, and before the date of the enactment of the legislation, according to the bill.
The legislation also doesn’t allow for a recoupment of payments already made to hospitals.
County, rural and urban hospitals in low-income areas “have been hit hardest” by the change, according to Banks’ news release, costing the state about $140 million annually. Rep. Nick LaLota, R-New York, is sponsoring the legislation in the U.S. House.
“Hospitals like Methodist, Schneck (in Southern Indiana) and Reid (in East Central Indiana) are struggling because of an unfair federal formula,” Banks said in a news release. “This bill fixes that, and helps Indiana hospitals get their fair share of funding.”
Through the changes in Disproportionate Share Hospital payment calculations, Methodist’s cap went from about $40 million to $13 million per year, according to a previous letter from Doyle sent to the Post-Tribune.
If Banks’ legislation is passed, Doyle hopes to see full Disproportionate Share Hospital payment levels restored, he said in a Wednesday statement.
Methodist Hospitals also continues to work with state and federal officials “to ensure that Methodist receives its fair share for the service provided to our communities,” Doyle’s statement said.
Lake County Commissioner Kyle Allen, D-Gary, expressed his support for Banks’ bill in a Wednesday news release.
“Methodist Hospitals, one of the largest employers in Lake County, Indiana, with an economic impact of more than $1 billion annually, plays an important role in serving the region’s most vulnerable citizens,” Allen said. “Its continued success is important to the future of Lake County.”
Gary Mayor Eddie Melton also showed support for Banks’ legislation and how it will benefit Methodist Hospitals, which houses its Northlake campus at 600 Grant Street in the city.
“Methodist Hospitals is the only hospital serving Gary, Indiana,” he said in the news release. “It provides essential access to physicians, specialized care, and critical health services that our families depend on every day. We urge our legislators to stand with Methodist Hospitals in its efforts to continue to deliver the care our community needs and deserves.”
In a July letter to the Post-Tribune, Doyle expressed the importance of protecting Medicaid dollars as cuts were considered in President Donald Trump’s budget reconciliation bill.
“Harmful policy changes or cuts to Medicaid could jeopardize access to care for those Hoosiers who need it most, including children, adults with disabilities, nursing home residents, and working families,” the letter said. “As Congress considers the budget reconciliation bill, we urge them to preserve the critical programs patients rely on, and that hospitals need to care for their communities.”
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