Submitted by Office of U.S. Senator Jim Banks
Banks
Last week, Senator Jim Banks’ (R-Ind.) bill, the Save Our Safety-Net Hospitals Act of 2025, was passed in the Senate and enacted into law.
This bill ensures that Indiana hospitals get their fair share of Medicaid Disproportionate Share Hospital (DSH) funding. Hospitals that treat very high percentages of Medicaid and low-income Medicare patients receive these federal payments to help cover their costs, but a 2021 recalculation shortchanged Indiana and several other states.
County hospitals, rural hospitals, and urban hospitals in low-income areas have been hit hardest, costing Indiana more than $140 million annually. This bill would restore the pre-2021 Medicaid DSH payment formula and distribute federal funding, which is already appropriated, more fairly.
“A recalculation in a federal funding formula shortchanged Indiana hospitals that serve rural and low-income urban areas,” Sen. Banks said. “This bill corrects that and delivers the support they were intended to receive.”
Key provisions of the bill include:
- Restore the Medicaid DSH payment formula that existed before the FY 2021 appropriations act recalculated it.
- Allow states to compute DSH payments including low-income “dual eligible” Medicaid and Medicare patients.
- Boost payments to Indiana hospitals by roughly $140 million annually and benefit several other states.
- Allow states to spend unspent DSH payments from earlier years, without any new appropriations.
Click here to read the full text of the bill.