The Indiana Hospital Association is awaiting a federal judge's ruling on the fairness of newly imposed Medicaid payment methods that could cost the state's hospitals more than $160 million.
Final briefs are expected to be filed this week on behalf of the state, which is defending its healthcare reforms. The reforms include reducing hospitals' Medicaid reimbursements to 85% from 100% of Medicaid costs.
"It's in the judge's hands now," said Robert Morr, vice president of the Indiana Hospital Association.
U.S. District Judge Larry McKinney of Indianapolis is expected to issue a ruling early next month. Judge McKinney presided over last month's trial between the IHA, which sued the Indiana Family and Social Services Administration and the Indiana Office of Medicaid Policy and Planning.
More than $80 million in state reductions started to take effect over a three-month period beginning in January.
The IHA's suit opposes the reduction in Medicaid payments, saying it could cost hospitals more than $160 million in the next year and a half. Attorneys for the IHA say the cost to hospitals is higher than the actual state cuts because the facilities will also lose matching federal Medicaid money.
Gov. Evan Bayh's administration has argued that Indiana has had some of the highest Medicaid payments in the country, and officials are only bringing reimbursement in line with what the state can afford.
Mr. Bayh's proposed $490 million in Medicaid cuts are targeted for the two-year budget period that ends June 30, 1995. After the cuts, the state is projected to spend $2.1 billion in Medicaid for that period.
The cuts affecting hospitals are: $32 million from inpatient care, $28 million from outpatient care and $23 million through changes in lengths of stays.
A suit similar to the IHA's is expected to go to trial sometime next month in U.S. District Court in Hammond, Ind.