A new state law aimed at reducing medical debt and increasing transparency in health care billing has been ceremonially signed by Indiana’s governor.
Authored by Julie McGuire, House Enrolled Act 1271 requires hospitals to inform patients about available financial assistance programs before sending bills to collections. Hospitals must also provide this information at intake, discharge and with the initial bill.
The legislation comes as nearly one in five Hoosiers carries medical debt, totaling more than $2 billion. Indiana ranks highest in the Midwest and 11th nationally for residents with health care bills in collections.
The law also addresses “downcoding,” a practice where insurance companies adjust claims to reflect lower-cost services, reducing provider reimbursement. Under the new measure, insurers can no longer rely solely on automated systems or artificial intelligence to downcode claims without human review. It also shortens the timeframe for insurers to recoup overpayments from two years to 180 days and requires at least 60 days’ notice before any rate reductions take effect.
McGuire said the law is designed to improve transparency, reduce unfair practices and better protect patients from unexpected medical costs.
This reporting is made possible by a grant from the Indianapolis African-American Quality of Life Initiative, empowering our community with essential health insights. https://iaaqli.org/
Contact Health & Environmental Reporter Hanna Rauworth at 317-762-7854 or follow her on Instagram at @hanna.rauworth.
Hanna Rauworth is the Health & Environmental Reporter for the Indianapolis Recorder Newspaper, where she covers topics at the intersection of public health, environmental issues, and community impact. With a commitment to storytelling that informs and empowers, she strives to highlight the challenges and solutions shaping the well-being of Indianapolis residents.
