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Indiana bill would mirror federal Stark law, give attorney general investigatory authority
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Summary
Senate Bill 147 would codify aspects of the federal Stark law in Indiana and authorize the state attorney general to investigate certain physician referral arrangements; hospitals, physicians and trade groups urged aligning any state law closely with federal definitions and enforcement protocols.
Senate Bill 147, introduced on the House Insurance Committee floor as the committee considered two Senate measures, would adopt key elements of the federal Stark law into Indiana law and permit the Indiana Attorney General’s office to investigate possible violations.
The bill’s author, State Senator Justin Bush, told the committee the measure is straightforward: “don’t break federal law, but just know that the state of Indiana is also watching, and that we can come in and investigate,” and he cited a high‑profile federal enforcement action involving Community Health Network as impetus for the proposal.
The bill’s sponsors and several testifying groups said they support the intent — preventing financial incentives that steer patients toward in‑network care for profit rather than clinical need — but many urged careful drafting so the state statute does not diverge from the federal framework. Grant Achenbach, testifying for the Indiana State Medical Association, said the association was neutral and asked the committee to ensure state language “is aligned with federal law so that we’re not creating duplicative standards.”
Brian Heaton, representing the Indiana Hospital Association, described the complexity of the federal Stark law, which applies to Medicare and Medicaid referrals and includes numerous definitions and more than two dozen exceptions that providers rely on. He told the committee that a state law that does not precisely incorporate the federal definitions, exceptions and enforcement procedures could create “unintended consequences for providers,” particularly in rural areas where referral patterns differ.
Several legislators and witnesses raised a separate drafting concern: the current House draft could reach beyond federal Medicare and Medicaid referrals into commercial insurance relationships. Heaton and other provider representatives warned that expanding the Stark law’s reach to commercial payers would import new compliance obligations and uncertainty for providers that do not participate in federal programs.
Supporters such as Matt Bell of Hoosiers for Affordable Health Care said a state remedy is needed because some whistleblowers are reluctant to go directly to federal authorities and because the state should be able to act when it sees potential fraud. Senator Bush read comments from Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, emphasizing that “Hoosier Medicare patients deserve to know that their care is based on the medical needs, not their doctor's financial gain.”
Committee members and witnesses discussed two principal changes provider groups seek: (1) explicit incorporation of federal definitions, exceptions and the self‑disclosure protocol into the state bill so that compliance under federal law would be deemed compliance under state law; and (2) clarification of the attorney general’s enforcement authority and remedies so the state and federal processes do not result in inconsistent liability or duplicative penalties.
No formal vote was taken on Senate Bill 147. The committee indicated it would hold the bill to allow additional amendment work. Senator Bush said he is open to language that mirrors federal Stark law more closely and to working with stakeholders on enforcement language that provides finality for providers.
The conversation included questions from Representatives Campbell, Mayfield, Shackleford, Layman and McGuire on whether the measure would apply to private insurance, how exceptions for rural practices and intra‑practice referrals would operate, and the scope of state enforcement.
