Lawmakers on the Senate health committee weighed two measures Wednesday to relax certain child care regulations and sharply restrict the prior authorization process, passing both unanimously.
Both bills are priorities for the Republican Senate caucus, giving them the substantial support of leadership and fast-tracking the legislation.
Republican Leo Sen. Tyler Brown, an emergency physician, detailed his bill to limit prior authorization, a process used by insurance companies to guarantee payment for services. He said that while the initial impetus behind prior authorization was to save money, it has become “blatantly wasteful” and “(gets) in the way of good patient care.”
“What we see, every day, is that prior authorization has become a huge hurdle to patients getting the care that they need. At the end of the day, the people who are affected most are Hoosier patients, because prior (authorization) slows down or even stops their ability to get care,” Johnson said.
But insurers and employers’ associations balked at the measure, concerned that health care costs would grow and the expenses would be passed onto the plan sponsors.
“Prior authorization acts as a filter, ensuring appropriate utilization of expensive treatments and medications. It helps weed out unnecessary procedures and promotes cost-effective alternatives, putting the brakes on runaway health care inflation,” said Ashton Eller, the Indiana Chamber of Commerce’s vice president of health care and employment.
“We would like to see … carriers working together, employers working with providers and all working together to get these processes more streamlined and modernize them to make sure that these types of prior authorizations can still happen but having a time-efficient manner … so that denials can be addressed more rapidly,” he continued.
Details of the prior authorization bill
Johnson, in particular, targeted the use of algorithms by insurers to process prior authorizations, including denials, rather than human physicians. The bill requires insurers not only use practicing doctors but that reviews of prior authorization requests be conducted by a physician in the same medical specialty.
“(Senate Bill 3) would eliminate prior (authorization) altogether for emergency services, routine care and common prescription drugs. It would also set an overall cap on prior (authorizations) so that the insurer could require prior (authorizations) for no more than 1% of providers and 1% of any given service,” Johnson said. “It also gives providers a break for a year if they meet an 80% threshold and get approval for their prior (authorizations).”
Several doctors testified about the limitations upon their practices placed by prior authorization requirements, detailing delayed care and denials. In a 2022 survey of members from the American Medical Association, 33% of physicians reported delayed care due to prior authorizations and spent an estimated 14 hours weekly dealing with prior authorizations. Hospitals, meanwhile, dedicate whole departments to navigating the complex process.
Eller acknowledged the need for reform, but said the occasional “hiccup” didn’t undermine the system’s “fundamental value.” He noted that the General Assembly passed a pilot in 2023 attempting to reduce prior authorizations for certain procedures in the state health employee plan.
“I think it’s prudent to see the financial impact that these changes will have … before making employer-sponsored plans subject to the provisions of Senate Bill 3 that you’re discussing today,” Eller said.
But Sen. Liz Brown, the author of that legislation, said more action was needed, referring to a physician example where insurers delayed care for a patient with kidney stones through the prior authorization process.
“I believe in 2018 I tried to go down this path with prior (authorization). I remember, at the time, 90% of denials were paid but they took up to a year,” said Brown, R-Fort Wayne. “Let’s use, as an example, our suffering kidney stone patient. Care’s denied, initially. Patient eventually receives care. How do we manage costs (here)? Because we’re stretching out payment and reimbursement? Or have costs somehow gone down as we’ve stretched out the patient’s literal pain and treatment?”
She pointed to moves in the private insurance industry to reduce prior authorizations amid ongoing federal pressure to address delays to care.
Johnson argued that maybe prior authorizations added costs, as opposing testimony couldn’t identify specific savings.
“The patient needs to be at the center of this discussion … it’s really easy to see that this puts a big burden in front of a patient getting care and adds a huge administrative cost to the system,” Johnson said. “We’re just adding more and more costs to health care.”
The bill passed the committee unanimously.
Incremental progress on child care
Sen. Ed Charbonneau’s child care bill passed with the support of over a dozen advocacy organizations, child care provider associations and government officials.
Under Senate Bill 2, child care workers will be categorically eligible for public child care subsidies, CPR training will become biannual — rather than annual — and age restrictions for certain workers are lowered to 18 for younger children and 16 for older children.
The hope is that by reducing regulation it will help with staffing shortages in the child care industry.
“I don’t want anyone to walk out of this room today thinking that we’re sacrificing safety in any respect whatsoever,” Charbonneau, R-Valparaiso, said. “Because we’re not.”
Several testified that the eased restrictions on child care workers will increase workforce retention and recruitment to a field that earns an annual median income of $25,730.
Additionally, it establishes three micro centers in a pilot program testing the framework for providers caring for less than 30 children. According to the fiscal note for the bill, the administrative oversight for such centers will cost between $80,000 and $130,000.
The bill includes some new responsibilities for state agencies.
The Family and Social Services Administration (FSSA), the agency tasked with overseeing many of the state’s child care programs, will be tasked with creating a dashboard of available subsidies for providers and parents. The Indiana Economic Development Corporation (IEDC) will provide updates related to 2023 efforts to incentivize businesses to offer child care support for their employees. Last year, the General Assembly established a tax credit for companies that either provide child care or offer subsidies to offset the cost and FSSA distributed over $18 million in grants late last year.
Brown questioned several lobbyists testifying on behalf of employers, asking them specifically about the child care supports their members offered to employees but didn’t seem satisfied with the vague answers.
“(Business associations) are not asking that. You’re just assuming that this is something the state would pick up. It would certainly be … nice to know the specificity, especially when we’re offering tax credits and things like that,” Brown said.
Due to the costs associated with the bill’s language, the committee sent the legislation to the Senate Appropriations Committee, which must approve it before it can move forward to be heard before the full Senate body.
By Whitney Downard – The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.
