[May 28, 2020] Indiana’s COVID-19 Cost Saving Measures

In response to the public health emergency’s impact on Indiana’s economy, including a decrease in revenue resulting in $1 billion less being collected in April, and an increase in unemployment resulting in a statewide rate of 16.9%, the State Budget Agency has announced a series of cost saving measures.

The first measure was a COVID-19 Cost Saving Measures Circular sent to all state agencies detailing various efforts that are to be taken by state agencies to ensure that funding is available to maintain and support the state’s critical services and operations.  These efforts include prioritizing the use of federal dollars and the implementation of a hiring freeze unless the position is essential to address the public health emergency.  All provider rates are to be frozen as well, unless increased compensation is necessary for the continuation of essential services, which has been reflected in the recent rate enhancement for COVID-ready nursing facilities.  The state’s temporary 4.2% rate increase for all nursing facilities was announced prior to the distribution of this Circular.  IHCA/INCAL continues to advocate for a temporary rate increase for Aged and Disabled Waiver assisted living providers as well, which are incurring similar expenses as nursing facilities as a result of the public health emergency.

The second measure was the State Budget Agency’s request of all state agencies to put together a plan on how they would cut 15% of their budget for Fiscal Year 2021, which begins on July 1, 2020, and ends on June 30, 2021.  Once again, the intent is to ensure that funding is available to maintain and support the state’s critical services and operations by determining what non-essential expenses can be reduced over the next fiscal year.  Each agency is expected to submit their individualized plan to the State Budget Agency in June.  IHCA/INCAL has engaged the leadership of the Indiana Family and Social Services Administration to determine what impact, if any, these cuts will have on long-term services and supports.  We will keep you updated as further details emerge.