2023 Legislative Session Updates

Fridays from the Statehouse

Fridays from the Statehouse

Fridays from the Statehouse is a special edition weekly newsletter issued during each legislative session.  These updates, brought to you by IHCA/INCAL’s Government Affairs Team, are designed to provide you with the latest information on key bills and other related news impacting Indiana’s long-term care industry.

2023 Legislative Session Priorities

Update Assisted Living Medicaid Rate Methodology, Reimbursement Schedule, and Annual Index

Modernize Regulations Impacting Temporary Staffing Agencies

Expedite Eligibility Determinations for A&D Waiver HCBS Statewide

Allow Medicaid Certification Transfers Within a County

Streamline HFA/RCA Licensure Requirements

Reauthorize the Quality Assessment Fee

Modernize the Indiana Professional Licensing Agency

HEA 1461 Signed Into Law

Governor Holcomb Signs Long-Term Care Reforms into Law

INDIANAPOLIS — May 4, 2023: Governor Eric Holcomb signed House Enrolled Act (HEA) 1461 into law this week, which addresses numerous workforce challenges and regulatory issues in the long-term care (LTC) sector.  

Authored by State Representative Brad Barrett (R-Richmond) and sponsored by State Senator Liz Brown (R-Fort Wayne), HEA 1461 reduces licensure requirements for administrators of nursing homes and assisted living communities, prohibits predatory business practices by temporary healthcare staffing agencies, allows Medicaid beneficiaries to more easily receive care at the location nearest to them or of their choosing, and requires the state to improve Medicaid eligibility determinations and develop a plan to improve rural access to care. 

“This is an incredibly important piece of legislation that will strengthen health care providers ability to hire more practitioners and continue to provide the highest level of care to residents,” said Paul Peaper, president of the Indiana Health Care Association/Indiana Center for Assisted Living (IHCA/INCAL). “The LTC sector has disproportionately lost more workers than any other health care sector during the pandemic, or approximately 10,000 practitioners in our state. We greatly appreciate the Governor and the General Assembly’s support this session in giving us more tools to rebuild the health care workforce and support our mission of providing the highest quality care for the most vulnerable and elderly Hoosiers in our communities.”   

Access the full press release here.

Bills we are supporting

HB 1460: Professional and Occupational Licensing
Author: Rep. Brad Barrett
Status: Passed Out of Senate Health and Provider Services
Notable Provisions:

HB 1461: Long Term Care Matters
Author: Rep. Brad Barrett
Status: Passed Out of Senate Health and Provider Services
Notable Provisions:

SB 2: Taxation Pass Through Entities
Author: Sen. Scott Baldwin
Status: Signed into Law by the Governor
Notable Provisions:

Bills we are watching

House Bills

HB 1001: Biennial State Budget
Author: Representative Jeff Thompson
Status: Passed Out of the House
Notable Provisions:

HB 1003: Health Matters
Author: Rep. Craig Snow  
Status: Passed Out of Senate Insurance and Financial Institutions
Notable Provisions:

HB 1004: Health Matters
Author: Rep. Donna Schaibley  
Status: Passed Out of the House, Assigned to Senate Appropriations
Notable Provisions:

HB 1179: Professional Licensing
Author: Rep. Ed Clere  
Status: Passed Out of the House, Referred to Senate Commerce and Technology
Notable Provisions:

Senate Bills

SB 4: Public Health Commission
Author: Sen. Ed Charbonneau
Status: 
Passed Out of House Public Health, Assigned to Ways and Means
Notable Provisions:

SB 6: Health Care Billing Forms
Author: Sen. Ed Charbonneau
Status: 
Passed Out of the Senate
Notable Provisions:

SB 7: Physician Noncompete Agreements and Referrals
Author: Sen. Justin Busch
Status: 
Passed Out of the Senate
Notable Provisions:

Bills we oppose

House Bills

HB 1129: Health Facility Staff Ratios
Author: Rep. Cash 
Status: Dead
Notable Provisions:

Senate Bills

SB 288: Damages in Wrongful Death Actions
Author: Sen. Freeman
Status: Dead
Notable Provisions:

2023 Session deadlines

HOUSE

SENATE

Last Day to Adjourn Sine Die – April 27

Week 1 Session Summary: Jan. 9-13, 2023

The Indiana General Assembly reconvened on Monday, January 9. The Governor laid out his priorities in his State of the State address on January 10 with the release of his 2023 Next Level Agenda calling for $5.5 billion in new spending. The Legislature will be working to craft the next biennial budget for fiscal years 2024 and 2025 with its business being completed before the end of April.

House Speaker Todd Huston rolled out his caucus’ priorities, focusing on economic development, passing a fiscally responsible budget, expanding work-based learning opportunities in our K-12 education system, supporting better access to affordable child care and housing options, and enhancing transparency, accountability and competition in the health care marketplace.

Senate Pro Tem Rod Bray also announced his caucus’ priorities, which are centered on cutting taxes, supporting more mental health services, enhancing state local health departments, tackling high health care costs, increasing the salaries for state police, and protecting Hoosiers’ data privacy.

IHCA/INCAL will be supporting various bills this session to help support our workforce, enhance the Medicaid reimbursement structure for home and community-based services, and improve the quality of care that are our residents receive. Everyone has a role to play in supporting our legislative advocacy efforts this session, so please do not hesitate to reach out to Nick Goodwin, ngoodwin@ihca.org, if you have any questions or want to be more engaged.

Week 2 Session Summary: Jan. 16-20, 2023

All bills have now been filed, and the committees are in full gear. Legislative committees serve the critical role of “public policy workhorses” for the institution. This session, much of the health care debate has and will center on the overall high costs of services, particularly targeted at nonprofit health systems/hospitals and insurance companies.

The long-term care industry will be supporting initiatives that attract prospective and current practitioners in the industry, enhance Medicaid reimbursement, and make services more accessible to vulnerable and elderly Hoosiers. House bills 1460 and 1461 address these priorities and are supported by IHCA and other organizations. These bills will be a focal point of the industry’s advocacy efforts.

Legislative proceedings move quick, so be sure to stay engaged with us each week. Everyone has a role to play in supporting our legislative advocacy efforts this session, so please do not hesitate to reach out to Nick Goodwin, ngoodwin@ihca.org, if you have any questions or want to be more engaged.

Week 3: Session Summary: Jan. 23-27, 2023

Legislative proceedings are picking up speed as we are three weeks into session now. The House and Senate remain focused on making health care reforms to reduce overall costs and improve transparency. House Bill 1004 is one of this agenda bills and will be heard in House Public Health next week.

SB 288 was heard in Senate Judiciary this week, but it was not voted on. The bill, concerningly, removes certain damage limitations in a wrongful death action if the act or omission that caused the death constituted a criminal act or certain tortious acts. Numerous stakeholders opposed the bill, including defense attorney Norris Cunningham, who represents many health care clients. The bill is not supported by IHCA/INCAL, ISMA, IHA, the Insurance Institute of Indiana and others. We will continue to track and work on this legislation with the legislators and other stakeholders and keep members posted on its progress (or lack thereof).

IHCA/INCAL did testify in support of improved reciprocity provisions in SB 400. We will continue to advocate for efforts that streamline the Professional Licensing Agency’s process, so our practitioners can be approved and licensed more expeditiously.

If you have questions or want to be more engaged, please contact Nick Goodwin at ngoodwin@ihca.org.

Week 5: Session Summary: Feb. 6-10, 2023

With the House’s committee report deadline approaching on Feb. 21 and the Senate’s on Feb. 23, legislative activity has ramped up. What these deadlines mean are that all bills that are not passed out of their assigned committees by these days will not advance any further in the legislative process. Notably, IHCA supported legislation, HB 1461 (Long-Term Care Service), passed unanimously out of the House Public Health Committee on Tuesday!

CarDon & Associates President & CEO Kent Rodgers, IHCA/INCAL President Paul Peaper and Silver Birch Living’s Jill Stott represented the industry by testifying to the Public Health Committee in support of our residents, practitioners and providers. This legislation will help improve access to care for aged and disabled Hoosiers, provide critical funds to assisted living communities serving Medicaid recipients and strengthen Indiana’s health care workforce.

The bill was recommitted to Ways and Means for additional deliberation due to its fiscal impact.

HB 1001 was heard in Ways and Means on Thursday of this week, and Paul Peaper, and Daryl Jones, COO of the Integral Group, testified in support of the increased appropriations for home and community-based Medicaid services, specifically for assisted living, that are included in the Governor’s Budget. The bill was held and will be voted out of committee by February 21.

Many other health care bills specific to licensure compacts, reciprocity agreements, improved processes for state agencies, de-regulation/tax cuts, and more are moving through the legislative process. So, follow along each week and don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions or want to be more engaged.

Week 6: Session Summary: Feb. 13-17, 2023

IHCA/INCAL supported HB 1461 cleared another hurdle this week, passing out of the Ways and Means committee with unanimous support. The funding formula for assisted living Medicaid providers was removed by a committee amendment. The Chair of Ways and Means, Rep. Jeff Thompson, indicated that this issue will be addressed in the biennial budget, HB 1001. HB 1001 is scheduled for “amend and vote” on Monday, February 20th. The Governor’s Medicaid budget appropriated an additional $121 million in FY 24 and an additional $161 million in FY 25 for HCBS providers and a handful of other health care providers. We will continue to advocate for increased Medicaid funding and a funding mechanism that is predictable and stable, so health care providers can make needed investments in Indiana. The current Medicaid rate methodology for assisted living providers lacks these core tenets, which is hampering growth in home and community-based services. With managed care coming in 2024 for long-term services and supports, HCBS will play a critical role in taking care of our aging population, particularly baby boomers.

Committee work is winding down with the following legislative deadlines quickly approaching:

Bills that don’t pass by these deadlines will be dead for the session, impacting hundreds of filed bills. We’ll keep you posted on all of the progress (or lack thereof!). Don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions or want to be more engaged.

Week 7: Session Summary: Feb. 20-24, 2023

IHCA/INCAL supported HB 1461 passed out of the House this week with unanimous support! The legislation will now be considered in the Senate and will be sponsored by Sens. Liz Brown and Ed Charbonneau.

The budget bill, HB 1001, also passed out of the House and includes the full Medicaid appropriation as requested by the Holcomb Administration. This includes an additional $121 million in FY 24 and an additional $161 million in FY 25 for HCBS Medicaid providers and a handful of other health care providers that are expecting Medicaid rate increases.

Notably, the budget includes new language that IHCA advocated for requiring FSSA to establish a schedule for reviewing Medicaid rates with no provider going longer than 4 years between rate evaluations. The schedule must be determined by November 1, 2023, and the first set of provider rates (as determined by FSSA) must be updated by November 1, 2024. FSSA’s current rate matrix work, specifically the new rate calculations for A&D Waiver services, is expected to be finalized and effective by this summer. Providers would see rate increases then, not necessary by the statutory deadline of November 1, 2024, as required in HB 1001.

As we approach the halfway point of session, numerous bills have already “died” since they were not passed out of their assigned committees by this week’s committee report deadlines. 2nd Reading and 3rd Reading deadlines are next week as follows:

Bills that don’t pass by these deadlines will be dead for the session. We’ll keep you posted on all of the progress (or lack thereof!). Please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions or want to be more engaged.

Week 8: Session Summary: Feb. 27-March 3, 2023

We are at the halfway point of session, meaning all of the bills that passed out of the House will now be considered in the Senate and vice versa. About 75% of the bills filed in the House and 67% of the bills filed in the Senate have all died. IHCA-supported HB 1461, authored by Rep. Barrett and now sponsored in the Senate by Sen. Liz Brown, passed out of the House with unanimous support. The legislation has been assigned to Senate Health and Provider Services for further discussion and debate.

As previously discussed, this year is a budget session. We will continue to advocate in the second half of session for predictability and stability in the Medicaid rates for home and community-based providers, specifically assisted living. The House added language into the budget that IHCA advocated for requiring FSSA to establish a schedule for reviewing Medicaid rates with no provider going longer than 4 years between rate evaluations. The Administration continues to support annual indexing as a part of their ongoing rate matrix work, which we are also supportive of and will advocate be codified with these other provisions.

Broadly speaking, the budget appropriates approximately $43.3B for fiscal years 2024-2025, which is slightly higher than the Governor’s proposed budget appropriated $42.9B for the biennium. Both versions of the budget anticipate healthy reserves at or above 10-12%. The Governor’s budget projected a structural surplus of $1.109B while the House version of the budget projects $1.045B for the biennium.

Another notable piece of legislation that is a focus of the Legislature’s time and energy: SB 1. The bill passed unanimously out of the Indiana Senate and helps support mental health programs that impact many Hoosiers. The debate is ongoing on how to fund the 9-8-8 crises response centers included in the bill.

To tackle workforce challenges, the House advanced HB 1002, which features a number of provisions that include expanding work-based learning opportunities, making high school graduation requirements more relevant to real-world expectations and creating funding flexibility for students to complete on-the-job-training and postsecondary credentials. The Senate is also focused on addressing workforce issues. Sen. Leising’s SB 167 passed out of the Senate, which would require high school seniors to file the Free Application for Federal Student Aid (FAFSA) unless opted out by the student’s parent, school counselor or principal. The measure aims to increase student access to (and awareness of) the wide range of grants and scholarships available to pay for postsecondary education and training that has become essential in a talent-driven economy.

A growing number of states have embraced policies similar to SB 167 in an effort to boost postsecondary participation and completion with positive results. Despite some improvement in recent years, Indiana ranks 37th nationally in education attainment, and the state’s college-going rate has dropped to its lowest point in years with only 53% of recent high school grads continuing their education. By making the FAFSA an “opt out” rather than an “opt in,” Indiana can begin to reverse this trend and strengthen its talent pipeline of skilled workers.

Please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions or want to be more engaged on public policy matters.

Week 9: Session Summary: March 6-10, 2023

IHCA/INCAL hosted its annual Long Term Care Professional Day at the Statehouse. Clif Porter, vice president of government affairs for the American Health Care Association (AHCA), and Julie Simpkins, National Center for Assisted Living board member, joined 60 long-term and post-acute care leaders at the Indiana Statehouse to advocate on behalf of the sector. The event offered an excellent platform for long-term care leaders to advocate for needed health care reforms that will strengthen the state’s workforce and increase access to care for more aged and disabled Hoosiers.

During the day, IHCA/INCAL hosted numerous legislative events, notably a legislator luncheon that was attended by Lt. Governor Suzanne Crouch and many representatives and senators to discuss key bills moving through the legislative process.

Gardant Management Solution, an IHCA/INCAL member with assisted living communities in Indiana and Illinois, catered the lunch for the event. It was a perfect opportunity to shine a spotlight on the high-quality meals that our seniors enjoy in Indiana’s LTC communities on a daily basis.

A big thank you to everyone who attended and made their voices heard on long-term care issues!

House and Senate committees are meeting and running through their slate of bills that passed out of the first chamber in the first half of session. HB 1461 was assigned to Senate Health and Provider Services. A committee hearing date has not been scheduled yet. The IHCA government affairs team is working to get it calendared in the coming weeks!

Please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions or want to be more engaged on public policy matters.

Week 10: Session Summary: March 13-17, 2023

The General Assembly continues to work through substantial issues in the health care space, specific to hospital pricing, physician noncompete agreements, the Governor’s Public Health Commission recommendations (and its price tag of $250M), and more support for mental health services. Broad and bipartisan support continues to grow for IHCA-supported, HB 1461, which will improve the long-term care industry by making needed workforce enhancements and increasing Hoosiers access to care in home and community-based services. Bills tackling all of these policies will begin to take final form over the next couple of weeks before the committee report deadlines in April. The IHCA government affairs team will continue to advocate on behalf of its members every day at the Statehouse to ensure these policies support our residents, practitioners, and providers.

Members of IHCA’s board of directors and the government affairs committee attended the Indiana Chamber of Commerce’s annual legislative dinner this week, also being joined by State Representative Mike Karickhoff (R-Kokomo).  Dr. Jim Johnson, William R. Kenan Jr. Distinguished Professor of Strategy and Entrepreneurship and Director at the Urban Investment Strategies Center at the University of North Carolina, was the guest speaker. He highlighted the considerable need for more health care services as our nation and state grapple with an aging workforce and aging population. He noted: “We are in the midst of a sea change. We are seeing a dramatic browning and graying of this country, and it will have a huge impact on every aspect of our lives and our way of life.”

He has a white paper titled: Business Alert! Gale Force Demographic Wind Gusts Ahead. I encourage you read it as we continue to do everything in our power to attract, train, recruit, and retain a qualified workforce to take care of Indiana’s more vulnerable and elderly residents.

You can also listen to Dr. Johnson on the Chamber’s podcast at www.indianachamber.com/podcast. He discusses, among other topics, the importance of having “courageous conversations” with each other and how states and communities should focus on getting workers to come back home.

Please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions or want to be more engaged on public policy matters.

Week 11: Session Summary: March 20-24, 2023

Much of the public health debate this week at the General Assembly was centered on SB 480 – Gender transition procedures for minors and HB 1568 – Prescription for hormonal contraceptives. The House Public Health Committee heard testimony on SB 480 for about four hours with approximately 100 people coming to the Statehouse to make their voice heard on the issue. The bill would prohibit a physician or other practitioner from: (1) knowingly providing gender transition procedures to an individual who is less than 18 years of age (minor); and (2) aiding or abetting another physician or practitioner in the provision of gender transition procedures to a minor. It also establishes civil enforcement actions and specifies certain medical exceptions.

The House Public Health Committee passed the bill out of committee by a vote of 8 to 5. The bill now moves to the full House for possible amendments and a vote by the full chamber. WTHR in Indianapolis covered the testimony and the debate. Their coverage can be viewed online here.

The other public health bill to draw a lot of attention in the other chamber was HB 1568. The bill would allow pharmacists who meet certain requirements to prescribe and dispense hormonal contraceptives. It would also require the Indiana board of pharmacy to revoke the license of a pharmacist who knowingly or intentionally prescribes a drug that is intended to cause an abortion. The bill passed with bipartisan support out of the House, but it has currently stalled in Senate Health and Provider Services. After much debate, the committee ultimately held the bill and didn’t take a vote on it.  The committee can take a vote on the bill at a future committee hearing.

WFYI in Indianapolis has covered the bill, and their article can be viewed online here. The Indy Star wrote an article about the hearing on Wednesday, which can be viewed here.

As always, please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions on bills moving through the legislative process or if you want to be more engaged on public policy matters.

Week 12: Session Summary: March 27-31, 2023

Senate Appropriations held a hearing on the biennial budget, HB 1001, on Thursday. Paul Peaper, IHCA/INCAL CEO, and Julie Simpkins, COO of Gardant Management Solutions, testified in the committee, advocating that the Legislature:

  1. fully fund FSSA’s Medicaid appropriation request;
  2. keep the current language in the budget, codifying FSSA’s rate matrix work or “rate schedule,” so providers know when their rate adjustments will be made; and
  3. codify an annual index, specifically a nationally recognized index, for home and community-based provider rates.

There is currently no requirement or process in place regarding when FSSA makes rate adjustments for home and community-based providers. FSSA has been working with stakeholders for many months to address this issue, specifically working to finalize new rates for home and community-based providers that will go into effect in 2023 after the state’s biennial budget is passed. FSSA has also put forward a rate schedule for when providers can expect to have their rate increased in the future. The current plan is for HCBS providers to have their rates adjusted every four years with an annual, static index.

It is noteworthy to point out that a coalition of home and community-based providers – IHCA/INCAL, LeadingAge, INALA, HOPE, INARF, and IAHHC – are all advocating for the same fiscal positions this session to maximize the lobbying efforts.

All of these associations are focused on implementing fiscal policy that will provide long-term predictability and stability for residents, patients, practitioners, and providers. This will help providers grow in Indiana and meet the ever-increasing need for services.

As always, please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions on bills moving through the legislative process or if you want to be more engaged on public policy matters.

Week 13: Session Summary: April 3-7, 2023

House Bill 1461, which is authored by Rep. Brad Barrett and sponsored in the Senate by Sen. Liz Brown, is IHCA’s agenda bill this session. The legislation makes many important statutory and regulatory changes concerning:

  1. licensure requirements for health facility administrators and residential care administrators;
  2. appropriate oversight of health care temp agencies;
  3. new flexibility within the certificate of need statute; and
  4. state government planning to increase rural access to health care services and to expedite determinations for individuals seeking home and community-based Medicaid services.

The legislation has received unanimous support throughout the legislative process and cleared another hurdle this week by passing out of Senate Health and Provider Services with a 10-0 vote. The bill has been recommitted to Senate Appropriations for further deliberation.

A special shout out to Matt Trammell, Central Division Vice President for Life Care Centers of America, who testified with IHCA in support of HB 1461 this week. His testimony highlighted the significant efforts that long-term care facilities are undertaking to recruit, train and retain frontline staff. Our industry knows and recognizes that our frontline staff are the backbone of long-term care. Accordingly, IHCA continues to advocate for adequate financial support and a balanced regulatory framework that empowers clinical and administrative staff to deliver consistent, high-quality care for residents. Enhanced Medicaid funding levels in the biennial budget (House Bill 1001) and appropriate regulatory reforms in House Bill 1461 will strengthen our industry and further our mission.

As always, please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions on bills moving through the legislative process or if you want to be more engaged on public policy matters.

Week 14: Session Summary: April 10-14, 2023

House Bill 1461 passed out of Senate Appropriations this week by a unanimous vote. With IHCA/INCAL’s support, the bill was amended to remove the landlord tenant provisions for assisted living providers. Other technical corrections were also made to the bill via the amendment.

The bill will be available for 2nd reading amendments on Monday and a final Senate vote on Tuesday. The bill will then be sent back to the House for a concurrence vote before going to the Governor for his signature.

The Senate unveiled their budget proposal on Thursday. Here are the notable highlights:

The budget does not require FSSA to use a nationally recognized index on an annual basis for HCBS rates, which IHCA will continue to advocate for. FSSA currently plans to implement a flat 2% annual index for home and community-based Medicaid rates, so either way this will be an improvement from the current rate methodology that does not include any type of guaranteed annual adjustment.

During the budget presentation, Sen. Mishler pointed out his concern for how quickly Medicaid expenditures are growing, which are now the fastest growing aspect of the state’s budget. Medicaid was 15% of the budget adopted in 2021 and is now 17% of the current budget. The state is spending ~$7.5B over the biennium on Medicaid, which is a $2B increase from the last budget.

As always, please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions on bills moving through the legislative process or if you want to be more engaged on public policy matters.

Week 15: Session Summary: April 17-21, 2023

House Bill 1461 was concurred on and vote out of the House this week with unanimous support. The bill now goes to the governor for his signature to become law.

The bill improves the licensure process and requirements for administrators of nursing homes and assisted living communities and creates new oversight of health care services temp agencies. The legislation also requires the state to improve the timeliness of Medicaid eligibility determinations, contract with a new entity to do eligibility determinations, and bring forth recommendations to increase rural access to home and community-based services. IHCA/INCAL is greatly appreciative of the support from bill author, State Representative Brad Barrett, and bill sponsor, State Senator Liz Brown, in getting the bill passed.

April Revenue Forecast
The State Budget Committee met this morning to hear the updated Revenue, Medicaid, and Economic Forecasts for April 2023. This data will play a key role in shaping the final version of the state budget, which legislators must complete by April 29th. The April revenue forecast shows an increase in total general fund tax collection of 1.9% or $386.4 million for the rest of FY23, 2.7% or $578.5 million in FY24 and 2.5% or $540.4 million in FY25 over the December revenue forecast, giving legislators about $1.5 billion over the biennium more than previously projected. With these increases, the total general fund collection is projected to be $21.8 billion for FY24 and $22.4 for FY25. Collections for sales tax, individual income tax, and corporate income tax all came in above the December 2022 revenue forecast target for the first three months of 2023. During the initial budget presentations from state agencies at the beginning of session, the total amount of new money requested was more than $700 million, and these additional projected funds give legislators the opportunity to fund these request or other legislative priorities.

Medicaid Forecast
For the first time in this forecast, we are seeing finality to the Public Health Emergency (PHE), which will be ending on May 11th, and the pandemic maintenance of effort requirements, which ended on March 31st. The department will be completing redeterminations throughout the next year, and this process is expected to reduce the number of covered lives by a little less than 400,000 from the peak of coverage. Additionally, the introduction of regular reviews of provider rate increases and the managed care program for long term services and supports will help to control overall Medicaid costs as the Hoosier population continues to age.

Overall Medicaid costs are expected to grow 6.3% in FY24 to $18.2 billion and an additional 2.6% in FY25 to $18.7 billion. The state’s share of this expense, starting from a baseline of $2.3 billion in FY23, is growing 45.1% in FY24 to $3.4 billion and an additional 9.9% in FY25 to $3.8 billion. This is a change of $90.5 million less than the December forecast for FY24 and $43.0 million more than the December forecast for FY25 for the state’s share.

The large increase in the state’s share of expenses is due to the phase out of the 6.2% enhanced federal match, which accounts for about $500 million of the increase, as well as decreased reimbursement from MCE’s once the redetermination period is complete. While many MCEs have been covering additional lives during the maintenance of effort, these lives were overall healthier than the average Medicaid user, leading to reimbursements to the state for unused care. As those lives start to leave Medicaid during the redetermination process, those reimbursements will shrink, creating the need for more state dollars.

This information does not include any current legislative proposals for HIP equalization or the rate matrix that is being developed by FSSA. However, projections for these items were provided to legislators in slides 10-12 of the presentation. More information on rate indexing can be found at https://www.in.gov/fssa/files/Rate-Review-Medicaid-Matrix.pdf.

Economic Forecast
The nation and state experienced stronger than expected economic performance at the end of 2022 into early 2023, meaning that the economic forecast has been revised upward for most major economic indicators. Because of this continued strength in the short-term, growth in GDP has been projected to slow down to modest, but still positive, growth for 2024 and 2025 of 1.4% and 1.9% respectively.

Inflation is coming down but still remains higher than desired, which has offset the gains that have been made in higher wages and revenues. Additionally, the collapse of Silicon Valley Bank (SVB) will likely lead to tighter lending standards from banks, which is predicted to offset the need for the Federal Reserve to raise interest rates as much as was previously projected.

Indiana experienced a 2.3% increase in payroll employment, led by the pandemic-affected sectors of leisure & hospitality, health & social services, and construction. In specific economic sectors, the outlook for manufacturing remains solid while the pace of homebuilding is expected to slow in 2023. Supply chain issues in most sectors continue to move towards resolution. Overall, Indiana remains on solid ground and the state’s risks mirror those at the national level, including the long-term issues of increasing the skills and number of workers in the labor pool.

The budget will be finalized next week, and the forecast was good news for legislators who are trying to fund more strategic initiatives, while maintaining an adequate reserve.

As always, please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions on bills moving through the legislative process or if you want to be more engaged on public policy matters.

Week 16: Session Summary: April 24-28, 2023

The General Assembly adjourned “sine die” early this morning, concluding the year’s legislative session. The biennial budget (House Enrolled Act 1001) includes numerous provisions that are notable to the health industry, including:

MEDICAID

TAXES

PUBLIC HEALTH

MENTAL HEALTH

EMPLOYER CHILD CARE EXPENDITURE TAX CREDIT (IC 6-3.1-39.5)

A more detailed presentation of the budget can be found online as well as the text of the budget.

In addition to the state’s budget, a Department of Local Government and Finance tax bill, HEA 1454, passed before the Legislature adjourned. Importantly, the bill included language supported by IHCA/INCAL expressly protecting the tax exempt status of nonprofit nursing homes, assisted living communities and other health facilities in tax years 2022, 2023, 2024, and 2025. These facilities have been tax exempt in state law since 1978, but county assessors have attempted to tax these entities over the year and recently in Allen County. This new language prohibits county assessors from assessing property taxes on our nonprofit health care facilities as long as they submit paperwork claiming their tax exempt status.

As always, please don’t hesitate to reach out to Nick Goodwin at ngoodwin@ihca.org if you have questions on bills that have been sent to the Governor for his signature or bills that have already been enacted into law.

IHCA/INCAL 2023 Legislative Session Accomplishments

Most Indiana laws went into effect on July 1, 2023.  The IHCA/INCAL had a successful session with many changes being implemented:

Securing Record Assisted Living Medicaid Funding and Unprecedented Reimbursement Schedule; Significant Tax Relief (HEA 1001)

Indiana Medicaid

Indiana’s Case Mix reimbursement system is complex and frequently changing. We track and provide guidance on a range of matters from new policies, cost report changes, audits and quality programs. We also engage in policy development and expansion on Medicaid Long Term Services and Supports and Medicaid Waiver and Home and Community Based Services.

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