An agency bill that passed unanimously out of committee died Thursday in an unusual move following the addition of several bipartisan amendments seeking transparency and accountability on a $1 billion Medicaid funding shortfall. 

Separately, Senate Republicans killed their own priority bill to sharply curtail prior authorization and Senate President Pro Tem Rodric Bray said the Medicaid blunder contributed to its failure.

“That is part and parcel of this conversation … trying to be really careful with what we’re doing fiscally,” Bray, R-Martinsville, said.

Senate Bill 3 would have eliminated the majority of prior authorization requests, a process some say can delay life-saving medical treatments, according to author Sen. Tyler Johnson, an emergency care physician. 

Bray called it “good legislation” but cited concerns about whether eliminating the process would add to overall health care costs.

Back in the House, Minority Leader Phil GiaQuinta, D-Fort Wayne, fell short of saying the majority yanked the bill rather than air grievances related to the the Family and Social Services Administration but said he was surprised by the move. 

“Sometimes we’ve seen other amendments that have been put forward that have killed bills, so to speak,” GiaQuinta said. “Maybe they thought this was going to happen. I don’t know. But clearly … someone didn’t want to have a discussion on the amendments that were put forward.”

During a bill’s second reading, a member of either party can file an amendment, giving minority members their greatest chance to effect change and put the entire body on the record when it comes to contentious issues. Three Democrats and one Republican filed a combined ten amendments to House Bill 1386, a “Medicaid Matters” bill to clarify FSSA Medicaid waivers under home- and community-based services. 

As an agency bill, it would traditionally face little opposition, making the Republican decision to kill the bill by refusing to call it before the second reading deadline on Thursday atypical.

After publicizing the discrepancy in December, FSSA announced a series of policy changes it said would save a combined $300 million. Among those changes was a decision to halt hourly Attendant Care wages for parents caring for disabled children in favor of per diem payments under Structured Family Caregiving.

Families say the latter isn’t financially feasible for them amid a nursing shortage when their children need care 24/7, which prevents them from taking traditional employment.

What happened?

House Speaker Todd Huston said Rep. Brad Barrett (R-Richmond), the bill’s author, passed on the bill when called for a second reading because of underlying issues. But when asked why a bill that passed out of committee with no opposition suddenly encountered problems following amendments, he acknowledged the greater decision-making process.

“We care, we recognize (and) we’re hearing from families that are expressing their opinions on this and we want to be responsible to … some of the most needy Hoosier populations. We also are trying to find a way to be fiscally responsible through it and make sure that there’s a path moving forward to provide the needed services,” said Huston, R-Fishers. 

Parents of medically complex children have rallied twice at the Statehouse, urging lawmakers and stakeholders to overturn FSSA’s decision. The decision was one of several announced in January as cost-saving measures but FSSA has repeatedly declined to share specifics on program savings and the total number of Hoosiers impacted. 

GiaQuinta questioned why, if the bill had problems, it couldn’t have been addressed in the Senate chamber. He noted other, imperfect bills passed this week with the expectation that senators would improve them during the second half of the legislative session.

But Bray said he didn’t see his caucus diving into family caregiving issues in the coming weeks because FSSA could make those decisions. The choice to offer payment to families came about during the COVID-19 pandemic, he observed.

“At that point in time, obviously, people coming into the home was really difficult and considered very dangerous … so it was a great thing to have,” Bray said. “FSSA is not suggesting to get rid of it, they’re trying to just put some guidelines around it to make sure it functions in a way that it needs to function but is not as exorbitantly expensive as it has been.”

 FSSA has said it would pay others for Attendant Care in the absence of nurses, including aunts and stepparents, but not biological parents.

Senate Minority Leader Greg Taylor observed that even Republican Lt. Gov. Suzanne Crouch had asked the agency to halt its transition away from parental attendant care, going against the governor’s office.

“It wasn’t those family caregivers that made the mistake that underfunded our Medicaid for the next two years,” Taylor, D-Indianapolis, said. “For us … to allow FSSA to make changes administratively that we know will harm Hoosiers is probably not a good move.”

Democrats unsatisfied, Republicans point to cost

For Rep. Greg Porter, an Indianapolis Democrat, the death of the House bill also represented a lost opportunity to hold FSSA accountable for the $1 billion Medicaid discrepancy. One of his amendments would have required that the agency have quarterly forecasts and halted reversions from Medicaid to other areas of the state’s budget — one of the reasons stakeholders said funding fell short. 

“This bill not being called down for debate today is a slap in the face to the millions of Hoosiers who rely on Medicaid for health care access. They deserve transparency as to how we’re going to fix the problem and stabilize the program to ensure they don’t lose vital care,” Porter said in a statement. “It’s unconscionable that, even after such a huge error threatened health care access to so many Hoosiers, Indiana Republicans decided to simply ignore the problem.”

Huston shared that the “mistake … is frustrating all of us” but pointed to Medicaid’s $20 billion overall budget and seemed focused on moving forward.

“I’m not ready to rehash how we got here. There are conversations about how we make sure it never happens again but, look, we’ve got to deal with what the facts are,” he told reporters. “The facts are … we’re spending $1 billion more and we’ve got to figure out how we can financially continue.”

In a statement from earlier this week, Gov. Eric Holcomb also pointed to the growing cost of family caregiving under the attendant care program, noting that it grew from $60 million in June 2023 to $120 million by December following a rate increase.

“This is precisely why last year, we pledged to work with the legislature to operate Medicaid in a financially sustainable way while providing services to all those representing the many compelling stories of parents, spouses and legal guardians caring for their loved ones,” Holcomb said. “To do so, we can not let this deficit grow exponentially month by month. In the meantime, FSSA will work with Hoosier families transitioning to a Structured Family Caregiving model to provide the necessary services these families depend on while maintaining a fiscally sustainable Medicaid budget.”

Indiana operates under a two-year budget cycle, meaning the $1 billion shortfall is across two years. Lawmakers will again tackle budgeting, including Medicaid spending, in 2025.

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