In Brief

Significant changes to drug pricing, hospital costs bills

By: - April 5, 2023 12:38 pm

Bills to address hospital costs and drug pricing saw significant amendments on Wednesday. (Getty Images)

Two committees navigating thorny health care pricing bills incorporated significant amendments Wednesday before moving the bills forward – with lawmakers expressing reservations about both measures.

A bill that would penalize hospitals for high costs was weakened in earlier amendments and an additional change in the Senate health committee further reduced its impact. 

A wide-ranging amendment removed the following from House Bill 1004:

  • Credits for Health Reimbursement Arrangements
  • Credits for physician-owned practices
  • A health care costs oversight board
  • Site of service language

The bill would penalize hospitals who delay in filing a report detailing patient revenues by payment type. The state will now note whether hospital prices for services exceeds 260% of Medicare – a benchmark that both senators and hospital lobbyists decried as ineffective.

Hospitals could be fined if their prices exceed 260% of Medicare starting in 2026, with penalties deposited into the state’s Healthy Indiana Plan account for Medicaid insurance coverage.

Even with the changes, the bill barely passed the committee on a 6-5 vote but even Republicans who voted for the hospital pricing proposal had “huge reservations.”

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“I have huge reservations but because I know it’s going to Appropriations, I’m going to allow the process to happen and continue so I will be a yes for now,” said Sen. Stacey Donato, R-Logansport.

The Indiana Hospital Association, which has repeatedly opposed the bill, bemoaned its passage, calling it an “unprecedented price cap.”

“We believe this unjustly targets hospitals and moves away from a holistic way of controlling overall health care costs. While hospital penalties increased, the penalty for insurance companies proposed by the House of Representatives was deleted. We believe there must be equal accountability for all health care stakeholders,” said Brian Tabor, president of the IHA, in a statement.

 Across the Statehouse, in a House Insurance Committee, a separate measure would require pharmacy benefit managers (PBMs) pass along drug rebates to the end user and passed more easily on a 9-1 vote.

Senate Bill 8 was also amended to delay the effective date and compelled insurers to use 100% of the rebates to lower premiums or return 85% directly to the individual. PBMs shall report to the state every six months, detailing the overall aggregate amount charged to health plans for claims.

Rep. Peggy Mayfield, R-Martinsville, was the sole opposing vote, saying, “We’re inserting ourselves into the contractual relationship between two private parties and that really bothers me.”

The bill moves to the House floor for further consideration. Both the drug pricing and hospitals costs bill will likely need a conference committee, where the House and Senate meet to find a middle ground between their versions.


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Whitney Downard
Whitney Downard

A native of upstate New York, Whitney previously covered statehouse politics for CNHI’s nine Indiana papers, focusing on long-term healthcare facilities and local government. Prior to her foray into Indiana politics, she worked as a general assignment reporter for The Meridian Star in Meridian, Mississippi. Whitney is a graduate of St. Bonaventure University (#GoBonnies!), a community theater enthusiast and cat mom.

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