Debate intensifies over Pathways long‑term care bill as providers and FSSA disagree on savings and risks

House Bill 12‑77, a package of changes aimed at stabilizing Indiana’s Pathways long‑term services and supports program, drew hours of testimony and sharply divergent fiscal views in the Appropriations Committee.

Sponsor remarks and providers’ testimony focused on three main changes in the bill: (1) transitioning nursing‑home residents who have been in a facility 100 consecutive days back to fee‑for‑service rather than leaving them under the managed‑care Pathways model, (2) implementing an individual cost cap for waiver services, and (3) creating a separate assisted‑living waiver to expand lower‑cost options. Representative Barrett and industry witnesses said the changes would reduce administrative overhead paid to managed‑care entities and free up capacity for home‑and‑community‑based services.

"We expect this bill to save more than $100,000,000 in Medicaid funding per year," Nick Goodwin, director of government affairs for the Indiana Healthcare Association, told the committee, summarizing his members’ analysis and pointing to similar policy moves in other states. Goodwin said the bill would move long‑stay residents (defined in the draft as 100 consecutive days) off a managed‑care roster where, he argued, the managed‑care entities provide little day‑to‑day value for that population.

Multiple provider witnesses reinforced that view. Yvonne Tanner, a registered nurse representing Brickyard Healthcare, said facility staff provide the bulk of care coordination and that managed‑care care coordinators have minimal on‑site involvement. Julie Simpkins, co‑CEO of Garden Management Solutions, and Sherry Berghoff, an assisted‑living owner whose father died while on the waiver wait list, urged the committee to act to expand access and control costs.

FSSA Secretary Roeb gave a contrasting assessment. He told lawmakers the agency’s actuaries see little to no net savings from the "100‑day" carve‑out because capitation and aggregate spending would likely shift rather than disappear. "The notion that we're saving money on the hundred‑day limit, I think, is an illusion," the secretary said, adding that carving out populations could require reopening contracts and finding new budget authority to fund additional waiver slots.

Committee members repeatedly asked for actuarial detail. Goodwin and provider witnesses presented back‑of‑envelope estimates and case examples; the agency said it would share formal actuarial analyses on request. Lawmakers also raised the human impact: several witnesses and senators described people who remained on the waiver wait list and families strained by delayed care.

There was no final vote on HB 12‑77. Chair announced the bill would be held and returned next week with amendment votes planned; the committee asked FSSA and sponsors to provide more precise fiscal modeling and clarification on implementation issues, waiver slot costs, and the effect on existing MCE contracts.

What’s next: The Appropriations Committee will take up amended‑vote consideration of HB 12‑77 next week after receiving additional fiscal analyses and possible technical amendments.