IHA legislative agenda focuses on Medicaid, insurance transparency

The Indiana Hospital Association will lobby in the coming legislative session for the elimination of duplicative reporting requirements, transparency from insurers and retroactive Medicaid coverage for Hoosiers booted from the Healthy Indiana Plan for procedural reasons.

Lawmakers return to Indianapolis in January for what is expected to be a contentious budget-writing session, with Democrats breaking the GOP’s supermajority in the House for the first time in 14 years.

The IHA’s legislative agenda, published Thursday morning, offers a glimpse into policy debates Hoosier lawmakers will entertain in the 2027 session.

The General Assembly will also have two new chairs for the House and Senate health committees. Republican Sen. Tyler Johnson, a physician, takes over the Senate panel while a new House chair hasn’t yet been announced. Former House leader Brad Barrett did not seek reelection and the vice chair was defeated.

Retroactive Medicaid coverage a priority for IHA

Lawmakers will return as federal Medicaid cuts mandated by the One Big Beautiful Bill Act begin to take effect. Those cuts include work reporting requirements for many working-age Hoosiers insured through the Healthy Indiana Plan starting in January.

“Mitigating the impacts of these cuts will be imperative to protecting long-term access, especially for rural communities,” IHA President Scott B. Tittle said in a news release Thursday.

In October, The Indiana Family and Social Services Administration estimated 58,000 Hoosiers were at risk of losing their coverage through HIP next year for failing to comply with work reporting rules. 

The agency has removed more than 500,000 Hoosiers from the state’s Medicaid rolls for unrelated reasons over the last two years, according to its Medicaid enrollment dashboard. AHA says Indiana hospitals are reporting a 30% surge in uncompensated care for uninsured patients at the same time.

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The IHA is pushing to codify retroactive Medicaid coverage for Hoosiers who were eligible at the time of service, as well as those who were disenrolled for administrative reasons to prevent disruptions in care. This follows a decision by FSSA last month to provide 30-day retroactive coverage for some Hoosiers who enroll in HIP next year.

The One Big Beautiful Bill Act also caps provider taxes like Indiana’s hospital assessment fee — one of two taxes the state uses to fund its share of HIP. 

The association wants to ensure revenue generated by the fee remains dedicated to HIP and Medicaid reimbursement for hospitals as the tax winds down, with any remaining funds directed to offset future Medicaid cuts. 

Outpatient drug discounts for hospitals

Lawmakers also may continue debating the merits of an obscure federal program known as 340B, which allows certain hospitals to purchase outpatient drugs at steep discounts while billing commercial insurance, Medicare or Medicaid for the full cost of the drug.

That controversial reimbursement model is the subject of intense debate: Supporters say 340B is critical to subsidizing services for low-income patients while critics allege the program is vulnerable to profiteering and abuse.

A proposed rule set to take effect in January will redirect any 340B savings Indiana hospitals once obtained through Medicaid to state coffers instead, while another law requires hospitals to report how 340B savings are used.

The program made IHA’s list of priorities for next year.

“340B was intended to be the pharmaceutical industry’s contribution to keep healthcare prices down,” Tittle said in the release. “These discounts represent just 3% of pharmaceutical companies’ global revenues — yet provide critical resources for patients and Indiana healthcare providers that struggle with sustainable operations as a result of government underfunding.”

Transparency from insurers

IHA is pushing for more transparency from insurers too, starting with a statewide review of claims submitted by insurers that administer benefits for the state’s Medicaid program.

The association also wants corporate insurers to share in-network rates directly with patients and report how many prior authorizations and patient claims are denied only to later be approved, which it said promotes “greater visibility into critical decisions that can delay and affect the care patients rely on.”

Both proposals are likely to meet resistance from insurers.

Ashton Eller, president of the Indiana Association of Health Plans, said insurers already share in-network rates with patients, while state-regulated plans report prior authorization, approval and denial statistics to the Indiana Department of Insurance and federal government each year.

He said insurers are under “rigorous, continuous” oversight and audits of managed-Medicaid plans too.

“When claims require additional review or recovery, it’s often to catch improper upcoming, duplicate billing or billing errors that would cost Hoosier taxpayers money,” Eller said. “If we weaken the ability of health plans to audit questionable claims, it only forces taxpayers to subsidize private billing mistakes and system waste.”

Steve Cooke, a spokesperson for the IHA, said consumers and employers continue to question what their premiums will ultimately cover — and what will they will be required to pay in copays, deductibles and coinsurance.

“Although certain information may be provided today, we regularly hear from both patients and employers that their health plan design is difficult to understand, and there is confusion about what will actually be covered after prior authorization requests and claim denials,” he said. “We look forward to working with the legislature to improve transparency in these areas.”

IHA estimates Indiana hospitals write off more than $1.6 billion each year in insurance claim denials and bad debt.

Meanwhile, the association says more than 80% of hospital claims are initially denied and overturned — amounting to $4.7 billion in delayed payments each year, which Indiana hospitals spend $400 million pursuing.

Still, Eller said premiums are a reflection of healthcare costs set by hospitals.

Insurers are “happy to be a partner in this focus on transparency as long as it leads to lower prices at the point of care,” he said. The group is expected to release its own legislative priorities in December.

Physician shortage, regulatory reform

IHA’s agenda also includes a call for more state funding for medical education to fend off a physician shortage, streamlined credentialing for newly hired physicians and elimination of duplicative hospital reporting requirements.

A report released by the Indiana Business Health Collaborative Thursday found there are just 239 active physicians per 100,000 Indiana residents — 6,380 physicians shy of demand.

Competition to recruit and retain physicians from other states is likely to worsen the shortage, according to the report, which recommends increased state funding for medical residency programs, particularly in primary care, specialty shortages and underserved communities.

“Without substantially increasing the number of physicians Indiana trains and retains, Hoosiers will face  increased limitations in access to medical services,” Beth Lock, chief executive officer and executive director of the IBHC, said in a news release Thursday. “The ripple effect is long-term consequences to community health outcomes, healthcare affordability and economic competitiveness.”