Appropriations committee advances Medicaid overhaul, PBM transparency and prior-authorization changes; 17 bills move forward

The Indiana Senate Appropriations Committee on Oct. 12 amended and advanced a slate of bills that included a major Medicaid reform measure, a pharmacy benefit manager transparency bill, and legislation to streamline health-care prior authorization, along with agency and policy updates across education, economic development and public safety.

The committee’s session prioritized Senate Bill 2, a bill that would move parts of Indiana’s Medicaid expansion out of the state plan into a federal waiver the bill’s sponsors call “HIP 3,” add work and volunteer requirements for certain adults, and set an enrollment cap. The committee also passed Senator Charbonneau’s SB 140 on pharmacy benefit manager (PBM) transparency and Senator Johnson’s SB 480, which narrows some prior-authorization burdens on clinicians and patients. In all, the panel advanced roughly 17 bills by voice or roll call votes; vote tallies are listed in the Votes-at-a-glance section below.

Why it matters: The Medicaid changes could change who is eligible for certain programs and how the state manages growth; PBM and prior-authorization bills target drug-pricing and administrative barriers that lawmakers said drive costs and delay care. Lawmakers debated trade-offs between cost containment and access, and several senators warned the changes could increase administrative burdens or shift costs to other parts of the system.

Senate Bill 2 — Medicaid changes and HIP 3 waiver intent

Senate Bill 2 drew the longest debate. Sponsor remarks and subsequent questioning showed the amendment’s intent: require the Family and Social Services Administration (FSSA) to report on how the state and federal governments enforce Medicaid eligibility rules (including a request for a look-back study), to remove a 36-month time limit in one program section, and to codify legislative intent that the FSSA seek federal approval to move parts of the Medicaid expansion into a waiver program the sponsors refer to as “HIP 3.”

Sponsor Senator Brown said the amendment is aimed at “right sizing” the program and preserving services for those most vulnerable while addressing long wait lists: “If you want those wait lists to go down, we need to get people off that shouldn't be on so we can really take care of the people that need it the most.” The amendment added a reporting requirement, clarified exceptions (for example, pregnant women remain covered but language is moved), and included a provision that any enrollment cap would be subject to federal law.

Opponents raised concerns about access and messaging. Senator Kidora and others opposed provisions that would restrict advertising of Medicaid services, calling that a poor signal to people in need. Several senators said they wanted more time to review how the amendment changes statutory language and to see the April revenue forecast before final votes.

Formal action: The committee adopted the amendment (roll call recorded) and later passed the amended bill by a roll call vote of 9–4. The committee recorded votes and several members explained their votes on the record.

Senate Bill 140 — PBM transparency and state PBM option

Senate Bill 140, sponsored by Senator Charbonneau, would require reporting and data collection on pharmacy benefit managers and give the state two options for the state’s own contracts: either run a state PBM or contract with a PBM that is not vertically integrated with an insurer. The amendment adopted in committee narrowed some provisions and clarified that data from PBMs the state contracts with would belong to the state.

Supporters described PBMs as an opaque part of the drug distribution chain that has contributed to rising drug costs and profits for intermediaries. “I am so tired about hearing about PBMs,” Senator Charbonneau said during discussion; she described the measure as a first step toward more direct procurement or state-run services. Senator Garten and others, who have studied health-care cost oversight, said vertical integration creates additional profit centers and argued for transparency and reporting requirements.

Formal action: SB 140 passed the committee unanimously, 13–0.

Senate Bill 480 — prior-authorization reform and amendment

Senator Johnson’s bill on prior authorization was amended in committee to remove or scale back provisions that generated large fiscal estimates in the original draft. The amendment removed several provisions that would have exempted large categories of drugs or services from prior authorization and eliminated caps that produced a substantial fiscal estimate. Sponsors said the changes keep the bill’s core intent while removing the fiscal impact to make the bill more workable.

Debate focused on patient protections and timelines. Supporters argued prior authorization often creates delays for clinically necessary care: Senator Brown said the committee should address administrative barriers that delay treatments “when you're having a heart attack” or when a patient needs a knee replacement after exhausting other options. Critics warned that, depending on the final language, prior authorization could still delay care in some cases and that more technical fixes are needed.

Formal action: The committee adopted Amendment 1 and the amended SB 480 passed the committee 12–0.

Other bills advanced with committee votes

Several other bills passed or were amended and advanced in the same session. Key items included: - SB 473 (various health-care matters, amendment clarifying services for the Center for the Deaf and Hard of Hearing) — passed 12–2. - SB 43 (independent study of casino-license relocation options) — passed 10–3 after a reporting-date amendment. - SB 222 (Civil Legal Aid Fund: move from formula to grant-based allocations; added reporting requirement) — passed 12–1. - SB 324 (tougher penalties for fentanyl/meth dealing and bail changes) — passed 10–3 after debate over DOC costs. - SB 358 (education bill amended to remove curricular/cost provisions) — passed 10–3. - SB 371 (DWD agency housekeeping, subpoenas, appeals modernization) — passed 11–1; committee discussion clarified appeals continue to be filed with the agency and assigned to in‑house administrative law judges. - SB 388 (1977 fund benefit increase for certain retirees) — passed 12–0. - SB 448 (higher education program review, stackable credentials, enrollment reporting) — passed 12–0. - SB 250 (MPERS technical and employer/employee contribution items) — passed 10–1. - SB 516 (IEDC changes including an Office of Entrepreneurship and Innovation and improved local notice on land purchases) — passed 11–0 (amended to maintain current school-use restrictions on property-tax proceeds from IDDs). - SB 463 (childcare staffing and advisory committee membership; fiscal items removed) — passed 11–0. - SB 486 (FSSA federal-regulation alignment) — passed 11–0. - SB 472 (cybersecurity best practices for local units; amended implementation timing and trust-fund threshold) — passed 12–0. - SB 488 (skills-training pilot program changed from a required to permissive pilot) — passed 12–0. - SB 505 (EMS transport: allow emergency responders to transport patients to alternatives to emergency departments under specific conditions) — passed 13–0.

Committee process and next steps

Committee chairs and sponsors repeatedly said some language reflects legislative intent rather than immediate policy changes and that federal approval or administrative rulemaking may be required before changes take effect. Several senators urged additional study or asked for second-reading amendments on bills with broad fiscal consequences.

The committee’s actions send many bills to the next stage of consideration; sponsors noted some measures will be revisited on second reading or amended further in the House.

Ending

The committee adjourned after completing its calendar for the day; members said they plan follow-up conversations on several items before second reading and floor action.

Votes at a glance

(See Actions array below for roll-call tallies and formal motions recorded in the committee.)