Appropriations Committee advances Medicaid overhaul, PBM transparency bill and cybersecurity measures; multiple bills pass

The Senate Appropriations Committee on Wednesday advanced a slate of bills covering Medicaid changes, pharmacy benefit manager oversight, cybersecurity best practices, and other agency and budget matters, approving most measures by roll call.

Senators spent the longest portion of discussion on Senate Bill 2, a revision to Indiana’s Medicaid programs that would direct the Family and Social Services Administration (FSSA) to seek federal approval to move parts of the HIP expansion into a waiver, allow a cap on who may be enrolled if the federal government permits, and add certain work and volunteer requirements for able-bodied adults without dependents. Senator Brown described the amendment’s intent as “right-sizing” the program to reduce wait lists and better target services. “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,” Brown said.

Senator Garten, who helpfully noted agency and federal discussions, told colleagues the bill sets legislative intent for the FSSA secretary to negotiate with the Centers for Medicare & Medicaid Services (CMS), but cautioned the state cannot implement provisions that CMS will not approve. “What we’re doing is basically setting in code our legislative intent for the secretary of FSSA to negotiate that with CMS and the federal government,” Garten said. Committee amendments removed a 36-month limit on eligibility and added language making a proposed 500,000-person cap “subject to federal law.” The amended bill passed committee 9-4.

The committee also heard extended debate about an amendment that would restrict advertising of Medicaid programs and add work/volunteer requirements for the HIP population. Opponents including Senator Kidora said banning advertising could send the wrong message and that work requirements risked harming people who cannot find jobs; proponents argued exemptions exist and the changes would preserve services for the most vulnerable.

Pharmacy benefit managers (PBMs) and transparency dominated another lengthy discussion. Senator Charbonneau described the aims of Senate Bill 140 as a transparency and reporting package to make PBM contracts and data available when the state contracts with PBMs or operates its own PBM. “I am so tired about hearing about PBMs… My initial reaction was just to get rid of all PBMs,” she said, adding that the amended bill would require that certain PBM data the state controls belong to the State of Indiana to allow audits and reporting. Senator Johnson, sponsor of a separate health bill on prior authorization, said his amendment sought to reduce administrative burdens: “It gets rid of some of the headaches in the process of prior authorization,” he said. SB 140 passed committee unanimously, 13-0.

Other measures approved by the committee included bills to: - Require an independent gaming-commission study of potential casino license relocations (SB 43). - Change the Civil Legal Aid Fund from a formula to a grant-based distribution and limit use of those funds for certain statutory challenges (SB 222). - Increase penalties for fentanyl and methamphetamine dealing and modify bail procedures for violent offenders (SB 324). - Update pension, workforce and agency technical items, and approvals for higher education program review and reporting (multiple bills).

Votes at a glance (committee actions): - SB 473 (various health matters; amendment clarifying services for the Center for the Deaf and Hard of Hearing) — amended and passed in committee, 12-2. - SB 2 (Medicaid/HIP changes; FSSA directed to seek waiver authority; work requirements; 500,000 cap subject to federal law) — amended and passed in committee, 9-4. - SB 43 (independent study on casino license locations) — amended and passed, 10-3. - SB 140 (PBM transparency, state PBM options) — amended and passed, 13-0. - SB 222 (Civil Legal Aid Fund moved from formula to grants; reporting requirement added) — amended and passed, 12-1. - SB 324 (penalties for fentanyl/meth; bail/judicial review for violent offenders) — passed, 10-3. - SB 358 (education provisions; provisional accreditation and curriculum feasibility provisions removed from the bill by amendment) — passed, 10-3. - SB 371 (DWD agency updates including subpoena and appeal procedures) — passed, 11-1. - SB 388 (Public safety retirement 1977 fund benefit increase) — passed, 12-0. - SB 480 (higher education program review and reporting; degree/program approvals, stackable credentials) — passed, 12-0. - SB 250 (pension technical and benefit elections) — passed, 10-1. - SB 516 (Indiana Economic Development Corporation changes; office of entrepreneurship, IDD reporting) — passed (vote recorded as 11 yes in committee roll call). - SB 463 (childcare staffing ratios and advisory committee membership) — passed, 11-0. - SB 486 (FSSA technical/federal compliance changes) — passed, 11-0. - SB 472 (cybersecurity best practices and a voluntary insurance trust fund) — passed, 12-0. - SB 488 (skills training pilot authority; amended to make pilot permissive) — passed, 12-0. - SB 505 (allow emergency medical responders to transport to alternative facilities such as certified community behavioral health clinics) — passed, 13-0.

Why it matters: The committee’s votes move these proposals to the full Senate or subsequent stages and shape how the state will approach Medicaid eligibility, federal negotiations with CMS, oversight of pharmacy benefit management, and state and local preparedness for cybersecurity incidents. Changes to Medicaid implementation, in particular, carry both fiscal implications and immediate effects for who is eligible for benefits and how work or volunteer requirements are enforced.

What lawmakers said and next steps: Proponents repeatedly framed the Medicaid proposals as an effort to “right-size” programs so federal and state dollars serve the most vulnerable; opponents warned that caps and advertising restrictions could reduce access and that changes should follow an updated revenue forecast. Several bills require follow-up with state agencies — FSSA for Medicaid waiver negotiations with CMS, the Indiana Economic Development Corporation for district reporting, and the Department of Workforce Development for procedural updates — before definitive implementation.

Committee follow-up items include requests for agency reports (FSSA and CMS negotiations, PBM data and reporting if the state contracts for a PBM, and IEDC reports on Innovation Development Districts) and additional floor debate on bills with significant fiscal impact.

The committee recessed after approving the listed measures; most bills will proceed to the Senate floor or additional committee stops as required by legislative process.