Indiana Medicaid just rewrote the ground rules for how much of each reimbursement must reach the people who deliver care. Beginning July 1, 2025, agencies must pass a fixed share of every payment to caregivers (and certain related overhead) and file an attestation by July 24. Below is a clear summary of the new policy, followed by a quick way to test your own numbers with Paradigm’s free calculator.
What Changed in Indiana Medicaid
The Indiana Family and Social Services Administration (FSSA) now requires agencies to pass a minimum percentage of Medicaid reimbursements directly to caregivers and related expenses:
Attendant Care (ATTC)
- Reimbursement Rate: $34.36/hour
- Required Passthrough: 70% minimum
This means for every hour of Attendant Care you bill, at least $24.05 must go toward caregiver compensation, benefits, and direct care expenses. This percentages includes not just wages, but also benefits, payroll taxes, and a proportional share of overhead directly related to care delivery.
Structured Family Caregiving (SFC)
- Reimbursement Rate: $77.54–$133.44/day (Levels 1-3)
- Required Passthrough: 60% minimum
For Structured Family Caregiving (SFC), the 60% passthrough is more straightforward, it primarily covers caregiver stipends, plus coach and nurse supervision expenses. Unlike Attendant Care's complex overhead allocations, SFC's requirement is simpler: 60% of the daily rate must go to the family caregiver and their direct support, period.
For the full text, see the official PDF (link opens in a new tab).IHCP BT2025105
What Counts Toward Your 70%
The IHCP bulletin is intentionally vague about what expenses qualify, stating they include "but are not limited to" wages, employee-related expenses (ERE), and administration and overhead costs. Based on the bulletin's language, the 70% passthrough encompasses: all caregiver wages (base pay, overtime, shift differentials, bonuses); employee-related expenses (payroll taxes, workers' comp, health insurance, retirement benefits, mileage reimbursements, PPE, training costs); direct supervision (RN assessments, field supervision, care coordination); and allocated overhead (the proportional share of schedulers, billers, HR staff, office space, and technology that supports Attendant Care operations). The key is that any expense must be reasonably connected to delivering direct care services and properly allocated if shared with other service lines.
The Calculator
Determining your passthrough percentage requires proper allocation of shared costs. Our calculator handles the math automatically. This calculator is only for attendant care hours.
What the calculator does
- Calculates your current passthrough percentage based on wages, benefits, and overhead.
- Automatically allocates overhead by service hours, so only the Attendant Care share counts.
- Flags any shortfall and shows the exact dollars (or cents per hour) you need to shift to reach 70 percent.
- Generates a downloadable summary for your audit file.
Practical Next Steps for Agencies
- Gather last month’s numbers (hours, caregiver payroll, overhead).
- Run the calculator to confirm compliance.
- Adjust wages or allocations if the result is below 70 percent (ATTC) or 60 percent (SFC).
- Sign and email the attestation to HCBS.Ratemethodology@fssa.in.gov no later than July 24 2025.
- Repeat monthly so you stay ahead of any drift.
Moving Forward
The 70% rule fundamentally changes how agencies must think about their cost structure. While it requires careful tracking and documentation, it also creates opportunity: agencies that operate efficiently can thrive while ensuring caregivers receive fair compensation.
Your Monthly Compliance Routine:
- Run your numbers in the calculator above on the same day each month
- Take a screenshot of your results showing the date and compliance percentage
- Save it in a dedicated compliance folder (e.g., "2025-08 Passthrough Compliance - 71.2%")
- If you're below 70%, document your corrective action plan
- Keep these monthly snapshots for at least three years
This simple habit creates an audit trail proving consistent compliance and protects you if questions arise later. Set a recurring calendar reminder now, your future self will thank you.
With proper systems in place, maintaining the 70% threshold becomes just another metric to monitor alongside revenue, overtime, and other KPIs.
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Disclaimer: This article and calculator are provided for educational purposes only and do not constitute legal or financial advice. Always rely on official IHCP guidance and your professional advisors for compliance decisions.
