Matt Doyle, Methodist Hospitals President and CEO

Indiana hospitals seek a lifeline to address government underpayments

Contributed By: The 411 News

In a time when parts of the nation’s healthcare system are being treated like political footballs, the Indiana Hospital Association, which represents 170 of the state’s healthcare facilities, says today’s climate has become unhealthy for its members.

Indiana hospitals are under severe financial strain and on the brink of reducing services and even closure due to government underpayment and harmful insurer tactics, according to an IHA statement. “In the past 10 years, nine Indiana hospitals have closed with four closings in the last 3 years; 29% of rural hospitals are operating at a loss,” the association reported.

In the “Current State of Indiana Hospital Finances,” an analysis prepared by Kaufman Hall for the IHA, finances for Indiana hospitals will worsen without intervention from lawmakers.

IHA released the analysis on Tuesday, January 27th in a virtual news conference that included executives from the state’s urban, suburban, and rural hospitals.

Kaufman Hall reported “a high probability of $1 billion in annual losses for Indiana hospitals over the next three to five years.”

“These findings make clear that Indiana hospitals are approaching a breaking point,” said Scott B. Tittle, IHA president. “With the 8th lowest Medicaid reimbursement rates in the nation and rapidly rising costs, hospitals simply do not have the tools they need to continue providing the level of care Hoosiers deserve.”

IHA is calling on state and federal lawmakers to modernize Medicaid reimbursement rates for Indiana hospitals; a rate that hasn’t changed in more than 30 years.

Hospitals in Indiana receive a Medicaid reimbursement rate of $.57 on each dollar of care.

“Unfortunately, in the One Big Beautiful Bill Act (OBBBA), there are plans to further reduce Medicaid reimbursement rates for Indiana,” said Matt Doyle, president and CEO of Methodist Hospitals.

Methodist Hospitals, with campuses in Gary and Merrillville, is a safety-net hospital as 80% of its patients rely on payments from Medicaid and Medicare.

Due to its large share of Medicaid and uninsured patients, Methodist Hospitals was able to receive federal Disproportionate Share Hospital payments. Doyle said those DSH payments, averaging $27 million a year, have been cut off for the last 3 years.

“I’m happy to say there is an appropriations bill in the U.S. Senate that has passed the House,” Doyle said.”It has a technical fix or corrective language for the DSH payments. It’s very, very important that those bills move forward and does include the corrective fix.”

“During these difficult reimbursement declines, further expiration of any Affordable Care Act subsidies will only increase the number of Medicaid and charity cases that our hospitals will have to take care of,” he said.

Operating expenses were greater than revenues in 2024 and the same is expected for 2025, Doyle said.


Brenda Reetz, Greene County General Hospital Chief Executive Officer

Greene County General Hospital has a payer mix of 62% between Medicaid and Medicare patients, 35% commercial patients, and 2-3% self-pay. “It’s actually pretty healthy,” said Brenda Reetz, its chief executive officer.

“I want to tell you a little bit about what it means to have a 35% commercial payer mix. We all know that commercial payers should be paying more than our government payers,” Reetz said.

“Sixteen percent of our patients are covered by Anthem, Blue Cross, Blue Shield. And for two years, we've experienced underpayments by our two largest commercial payers, Anthem and United Healthcare. We continue to see millions of dollars being withheld by them,” Reetz said.

Reetz said she had been optimistic about the Rural Health Transformation Program, a $50 billion fund established by the OBBBA (signed as Public Law 119-21 by President Trump) to strengthen and modernize health care in rural communities.

“So while this Rural Health Transformation fund seems like it's going to be this great, big, beautiful band aid to help rural health care survive the Medicaid cuts that we're seeing, it's not going to happen,” Reetz said. “There are too many rules in place and we can't use that funding for what actually needs to be used for rural health care.”

Story Posted:02/01/2026