A "comprehensive plan" to address health care costs was approved by the House Tuesday. The bill tackles costs from more than just one angle — including a prior authorization policy that was removed from a Senate bill last week.
House Bill 1003 author, Rep. Brad Barrett (R-Richmond), said the bill is built on six key pillars: lower costs; fight waste, fraud and abuse; enhance transparency; expand access; promote wellness and increase competition.
It covers a wide range of issues including Medicaid fraud, price transparency and prior authorization reforms.
Barrett said the bill makes three significant changes to prior authorization. The first change was removed from Senate Bill 480 during a committee last week over fiscal concerns.
“Peer-to-peer review, so that a neurosurgeon gets talks to a neurosurgeon when it comes to arguing the need for a surgery or a study,” Barrett said.
The bill also includes language that would prohibit insurance companies from rescinding prior authorization once it has been granted.
“If you, in good faith, have been given the opportunity to proceed with a study or a surgery, then it should not be swept out from under you,” Barrett said.
Barrett said when he was surgeon, he had patients waiting to have a procedure that had their coverage challenged because of an administrative issue — he wants to address that.
HB 1003 would also require the Indiana Department of Insurance to establish a clearing house for providers and insurance companies to file complaints or issues related to prior authorization for the state to analyze.
READ MORE: House committee approves GOP's 'comprehensive' plan to address health costs
However, some lawmakers raised concerns about some of the key reforms included in Barrett's plan, which was part of the House GOP’s legislative priorities.
Rep. Ethan Manning (R-Logansport) said he agrees with several provisions in the bill, but is worried about some of the policies. He said the language that would “effectively eliminate” the 340B drug pricing program in Indiana is the most “egregious.”
The bill introduces strict guidelines to a federal drug program known as the 340B program. Barrett said this is to create transparency around the program.
The language would prevent hospitals from charging more than the discounted cost of the drug through the program, with an exception for the cost of running the program.
“It's a gift to Big Pharma,” Manning said. “I think we'd see more cost shifting. And we wouldn't actually see any cost savings because they'd buy commercial rates, and bill at the same commercial rates they're billing now.”
Manning said this would disproportionately harm small and rural hospitals.
The 340B drug pricing program was created in partnership with pharmaceutical companies — which agreed to provide “significant” discounts to eligible health care providers in order to participate in the Medicaid program.
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Those providers, typically clinics or hospitals, can utilize those discounts in a variety of ways. Or they can take the amount between the discounted amount and the amount that an insurance company reimburses them and use that money to increase access in other ways.
For example, if a hospital gets a typical reimbursement on a discounted drug, the 340B savings can be used to support public health initiatives or provide charity care.
Small and rural hospitals tend to use this program as a way to support their population with limited resources.
Manning also said the site neutrality language in the bill would pose a threat to small and rural hospitals.
The bill extends site neutrality language present in Medicare to Medicaid and commercial insurance. This means that people receiving services at an outpatient facility can’t be charged more than they would be at a hospital for the same service.
Rep. Victoria Garcia Wilburn (D-Fishers) said not all outpatient settings operate under the same cost structure as traditional offices do.
“Requiring parity in reimbursement rates may lead to reduced access to care, as providers may choose to limit the scope of services or opt out of contracts, especially in rural and underserved areas,” Garcia Wilburn said.
Garcia Wilburn also pushed back against language that would give the Medicaid Fraud Control Unit in the attorney general’s office law enforcement power. She said this could unfairly target providers.
The author of the legislation said the bill covers about 15 policy areas and many of those areas need more work in the second half of the legislative session.
The bill now heads to the Senate.
Abigail is our health reporter. Contact them at aruhman@wboi.org.