Medicaid reimbursement for children's hospitals., the official text

First Regular Session of the 124th General Assembly (2025)

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  HOUSE ENROLLED ACT No. 1024

   AN ACT to amend the Indiana Code concerning Medicaid.

   Be it enacted by the General Assembly of the State of Indiana:

   SECTION 1. IC 12-15-15-1.2, AS AMENDED BY P.L.76-2023,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 1.2. (a) As used in this section, "children's
hospital" means:

      (1) a freestanding general acute care hospital that:
         (A) is designated by the Medicare program as a children's
         hospital; or
         (B) furnishes inpatient and outpatient health care services to
         patients who are predominantly individuals less than nineteen
         (19) years of age; or

      (2) a facility located within a freestanding general acute care
      hospital that:

         (A) is designated by the Medicare program as a children's
         hospital; or
         (B) furnishes inpatient and outpatient health care services to
         patients who are predominately individuals less than nineteen
         (19) years of age.
   (b) This section applies to reimbursement for inpatient Medicaid
services and outpatient Medicaid services provided to a Medicaid
recipient who is less than nineteen (19) years of age at a children's
hospital that is located in a state bordering Indiana. This section does
not apply to reimbursement for non-emergency medical transportation.

HEA 1024 — Concur
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   (c) As used in this subsection, "cost outlier case" means a Medicaid
stay that exceeds a predetermined threshold, defined as the greater of
twice the diagnosis-related group (DRG) rate or a fixed dollar amount
that has been established by the office. The office shall reimburse a
children's hospital for covered services provided to a Medicaid
recipient that is described in subsection (b) at a rate set by the secretary
that is based on a reimbursement formula that is:

      (1) comparable to the current federal Medicare reimbursement
      rate for the service provided by the children's hospital; or
      (2) one hundred thirty percent (130%) of the Medicaid
      reimbursement rate for a service that does not have a Medicare
      reimbursement rate.
The reimbursement methodology under this subsection must factor in
any cost outlier case in a manner that results in the final reimbursement
rate made to a hospital meeting the reimbursement requirements
specified in this subsection. The office may, upon factoring in the cost
outlier case in determining the final reimbursement rate, make
retroactive reimbursements to an out of state children's hospital to the
date of the initial Medicaid waiver application.
   (d) Before September 1, 2021, the office shall apply to the United
States Department of Health and Human Services for any state plan
amendment or Medicaid waiver necessary to implement and administer
this section. Before June 1, 2022, the office shall apply for an
amendment to the Medicaid waiver concerning reimbursement under
this section that is necessary to implement the changes required by
amendments made to this section concerning factoring in any cost
outlier case.
   (e) The office may adopt rules under IC 4-22-2 necessary for the
implementation of this section.
   (f) This section expires July 1, 2025. 2027.
   SECTION 2. An emergency is declared for this act.

HEA 1024 — Concur
Speaker of the House of Representatives

President of the Senate

President Pro Tempore

Governor of the State of Indiana

Date:                             Time:

HEA 1024 — Concur