The legislation comes after Mercedes Wells was wheeled out of Franciscan Health in Crown Point, then gave birth minutes later in her car.
Kelly, a candidate for U.S. Senate, now plans to introduce the "Wells Act."
"It urges hospitals to develop and implement a safe discharge labor plan that includes clinical justification for discharge and patient understanding," Kelly said.
Wells and her husband were in attendance at the announcement.
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"I don't want anyone to have to experience that during a time they should be happy and overjoyed," Wells said.
Franciscan says the doctor and nurse involved with Wells' care, no longer work at the hospital.