INDIANAPOLIS – Indiana lawmakers say one of their top priorities this session is lowering healthcare costs, and they’ve proposed a bill that would fine hospitals for exceeding new limits on pricing.

Indiana lawmakers say Hoosiers are facing significantly higher healthcare costs compared to the national average.

“The average hospital facility fee in Indiana is 329% of the federal Medicare rates, while the national average is 260% of the federal Medicare rates,” said State Rep. Donna Schaibley (R-Carmel), who is leading an effort to try to bring down those prices.

Schaibley has introduced House Bill 1004, which aims to increase competition among providers.

Her bill would ban certain nonprofit hospitals from forcing doctors to sign non-compete employment agreements. And it would provide a $10,000 tax credit to doctors who have an ownership stake in their practice instead of working for a hospital system.

“Supporting independent physicians is not only an important element of accessibility, it is a way to lower costs in Indiana,” said Matt Bell, who helps run Hoosiers for Affordable Healthcare.

The bill would also require nonprofit hospitals to send reports to the state on prices and revenue. And it sets a cap on some healthcare expenses.

If a nonprofit hospital charges more than the national average fee, or 260% of the federal Medicare reimbursement rate, the hospital would face financial penalties. Critical access and county-owned hospitals would be exempt.

“I think after about four years, we should expect this legislation to potentially reduce prices by about 15%,” said Mike Hicks, an economics professor for Ball State University.

But several hospital leaders say they have concerns.

Bryan Mills, president and CEO of Community Health Network, argued the fees hospitals charge aren’t entirely in their control.

“Pharmaceuticals, devices, various therapies that we do – we don’t set those prices,” Mills told lawmakers.

Several hospital officials told the House Public Health committee Tuesday that they want to work with legislators to find other solutions.

Mike Schroyer, president of Baptist Health Floyd in New Albany, argued many hospitals can’t afford these policy changes.

“A hospital that is running on negative margins does not have excess $30 million,” Schroyer said.

Lawmakers did not vote on the bill in committee Tuesday but plan to do so next week.