IN HB1385

Mandates (rather than permits) the Office of Family and Social Services to develop programs increasing Medicaid reimbursement for hospital inpatient and outpatient services, with state directed payment program rates required to be at least Medicare reimbursement levels

Prohibits money in the incremental hospital fee fund from being used to fund general Medicaid programs, restricting its use to specific Healthy Indiana Plan expenses

Requires the Office of the Secretary to perform annual reconciliation of capitation rates attributable to the incremental hospital fee and submit findings to the budget committee by November 1 each year

Modifies hospital assessment fee allocation to require 28.5% for Medicaid expenses and 71.5% to hospitals for leveraging federal funds, while removing provisions allowing fees to fund state directed payment programs dependent on managed care assessment fees

Amends the hospital statewide average rate pricing study to require use of at least 85% of 2024 paid claims data, prohibit use of federal price transparency files, and extend the completion deadline from June 30, 2026 to September 30, 2026