Weekly StateVitals Update: Volume 6 (February 10, 2025)
Arkansas
House committee hears bills reforming vision insurance and benefits. On Wednesday of last week, the House Insurance & Commerce Committee held a hearing on HB 1353. Among myriad of proposed reforms related to vision care plans, the bill would require neutrality of how network participating providers are showcased to enrollees, establishes floors based on Medicare relative to network reimbursement rates, establishes limitations on practices that would be considered patient steering, prohibits incentivizing enrollees on obtaining any specific covered or non-covered services or materials, or reimbursement tiering for network providers dependent on their choice of laboratory or optical supplier. Notably, the measure would also prohibit the use of extrapolation in auditing procedures and establish guardrails on other auditing practices by vision care plans and insurers. The bill is similar in nature to a 2023 bill passed in Texas (HB 1696), which is currently enjoined and tied up in litigation before the Fifth Circuit Court of Appeals. The House Insurance & Commerce Committee moved the bill out of committee with a favorable recommendation to the full House.
Colorado
Lt. Governor Primavera leads an effort to set guardrails for health care reimbursement. This week, Lt. Governor Dianne Primavera and Rep. Kyle Brown (D-Louisville) announced their intent to introduce legislation that would attempt to address the growing cost of healthcare. Specifically, the measure intends to establish reimbursement maximums for in-network (165% of Medicare) and out-of-network (135% of Medicare) prices paid to most hospitals through the state employee health plan and the small group market. The measure would also establish a floor for primary care and behavioral health services at 135 percent of Medicare for both the small group market and the state employee health plan. Finally, the bill would require a feasibility study to explore whether local governments and school districts can participate in setting a similar reimbursement limit. In their announcement, the Lt. Governor and Rep. Brown noted similar efforts in Oregon and Montana that have proven effective. It’s expected that Sen. Jeff Bridges (D-Arapahoe County) will lead the effort in the Senate. The measure should be filed for introduction in the coming days.
Connecticut
Governor Lamont to prioritize reducing prescription drug costs. Governor Ned Lamont (D) announced this past week that he is introducing legislation to reduce out-of-pocket costs for patients needing access to prescription drugs. With the support of the State Comptroller and the Commissioner of the Connecticut Office of Health Strategy, the proposal is using the vehicle of HB 6870 for consideration. The measure would authorize patients to count out-of-pocket and out-of-network drug costs to their annual deductible if they paid a lower price than what they would have received at an in-network pharmacy. The bill also limits price increases allowed by manufacturers for generic and off-patent drugs to the annual rate of inflation and authorizes the state to assess the feasibility of establishing a Canadian prescription drug importation program. The bill has been referred to the Joint Committee on Insurance and Real Estate and awaits further action. Similar proposals have been introduced in Connecticut in the past, however given that the measure was introduced at the request of the Governor, it is highly likely to receive serious consideration over the coming weeks.
Idaho
Bill introduced to implement reform to the Medicaid expansion program. Rep. Jordan Redman (R-Coeur d’Alene) has introduced HB 138, which stands likely to receive a hearing over the coming weeks pertaining to the state’s Medicaid expansion program. The measure would create a poison pill that would prohibit the state from extending eligibility to the expansion population if federal financial participation were to ever be less than 90 percent. Additionally, the measure would implement work requirements for all able-bodied adults enrolled in the expansion program. For compliance, it would require enrollees to work twenty hours or more per week averaged monthly or meet other qualifying activity (inclusive of volunteering, a work program, or meets one of eight exemptions). The bill would further cap enrollment in the expansion program to the lower of 50,000 enrollees or a total represented by the total number of adults enrolled in Medicaid that are disabled or over 65 years of age, whichever is less. Additionally, the measure implements a lifetime benefit limit of 36 months for individuals enrolled in the expansion eligible category. While other changes are made to the bill, it’s highly likely that Republicans in the House give consideration to the measure or some amended version. Medicaid expansion in Idaho was passed by voter referendum in 2018.
Indiana
House committee passes health care utilization management and reimbursement reform. The House Committee on Insurance recommended passage of HB 1003 as amended this past week. The measure has a litany of provisions impacting how providers are reimbursed or what they can charge patients. Specifically, the latest amended version includes provisions:
Requires insurers to provide reimbursement for a service rendered in an outpatient setting at the same rate that is provided at a physician’s office.
Requires providers to submit claims that include the appropriate place of service code for the setting of where the services are rendered and prohibit certain providers from including facility fees or changes on an individual provider form.
Prohibits a 340B covered entity from charging an individual for a prescription drug at a price greater than what the drug was obtained for.
Requires nonprofit hospital systems to report a list of facilities that are eligible to bill on an institutional provider form.
Prohibits an out-of-network provider rendering nonemergency services at an in-network facility from being reimbursed more than the 2019 median in-network rate with a specified adjustment.
Requires hospitals to provide good faith estimates immediately beginning June 30, 2026.
Prohibits an insurer from rescinding prior authorization within one year after the prior authorization is approved and ensures that any adverse determination made is done by a clinical peer of the provider requesting the prior authorization.
While the measure contains additional provisions, the sponsor of the measure, Rep. Brad Barrett (R-Richmond) indicated that the bill remains a work in progress. It now heads to the House Ways and Means Committee for consideration.
House Public Health Committee advances state directed payment program measure. This last week, the Committee passed favorably HB 1586, which would establish a state directed payment program for Indiana. The measure would specifically authorize Indiana hospitals to be assessed to the federally allowed maximum of the Hospital Assessment Fee, with the intent to pull down additional federal Medicaid dollars. While the details of the methodology for the assessment are still being tailored, Indiana would join the majority of states in utilizing a hospital assessment via a directed payment program to draw enhanced federal revenue. The measure heads to House Ways and Means for consideration next.
Kentucky
Senate committee hears 340B legislation in the face of new anti-340B campaign. The Senate Committee on Health Services held a hearing last week on SB 14, which would require pharmaceutical manufacturers to extend 340B drug pricing to contract pharmacies. It was eventually reported favorably from the Committee. The sponsor of the bill also happens to be the Chairman of the Senate Health Services Committee, Senator Stephen Meredith (R-Litchfield). Similar to what’s arisen in at least five other states, a President Trump-aligned PAC, Building America’s Future, is running an anti-340B advertising campaign in the state. The advertisement claims that the program subsidizes healthcare for immigrants and gender transition for minors. In Kentucky, the Republican Senate Caucus has iterated that they have been unable to substantiate the claims made in the advertisement. Similar legislation sponsored by Senator Meredith advanced through the full Senate last year but was unable to secure a vote in the House.
Senate passes bill removing CON requirements from freestanding birthing centers. This past week, the Senate voted unanimously to approve passage of SB 17. The measure would remove the certificate of need (CON) requirements for freestanding birth centers provided the centers have no more than four beds. Under a negotiated compromise with the Kentucky Hospital Association, the measure would require freestanding birth centers to have a medical director that is a physician and have a transfer agreement in place with a hospital that provides obstetric services. The bill would also require the centers to be within 30 miles of a hospital. The key tenets of the measure were negotiated and agreed up by stakeholders during the interim period before the 2025 legislative session began and is the result of a years-long effort to reform CON requirements in some limited fashion. The measure now heads to the House for consideration.
Missouri
Despite constitutional amendment, facility licensure barrier remains in effect. Last week, oral arguments were heard in state circuit court asking the court to reconsider a December decision made on a challenge pertaining to the state’s facility licensure process for sites of care rendering abortion care. Under the upheld requirement, any facility that performs such services is required to secure a unique license issued by the Dept. of Health and Social Services. To obtain such facility licensure, a building must meet certain physical requirements and ensure clinicians perform specific exams. Despite voters passing a constitutional amendment in November 2024 authorizing access to abortion care for residents, this facility licensure process has disallowed a majority of abortion care providers, such as Planned Parenthood, from providing such services. In a previous ruling by the state circuit court, the court issued an opinion that the facility licensure process was separate from the constitutional amendment’s intent of the rights of individuals seeking care. However, the state has argued in response that providers seeking a waiver of those requirements are eligible to request certain exemptions. A decision is forthcoming in the coming weeks.
Montana
House takes key procedural vote to move forward on Medicaid expansion extension bill. Sponsored by Ed Buttrey (R-Great Falls), HB 245 passed a preliminary floor vote last week that would remove the sunset date from the Medicaid expansion program. The program, originally passed in 2015, was set to expire this year. The chamber voted on a 63-37 split, with a coalition of Republicans and Democrats voting to remove the sunset date. The opposition to the measure largely cited concern in extending the program should the federal government opt to match less than the current 90 percent for the expansion population. Proponents have responded that the authorizing language from 2015 already accommodates such a scenario where if that match rate were to decrease, the Legislature would either have to take action or the Department of Health would be required to increase premiums to make up the difference in state expenditures. The measure is expected to be called for third reading and final vote in the House in the near future.
Nebraska
340B legislation receives hearing and sparks industry responses. The Banking, Commerce and Insurance Committee held a hearing on LB 168 this past week. The measure would require pharmaceutical manufacturers to extend 340B drug pricing to contract pharmacies. While the hearing resulted in significant support from hospitals and other 340B covered entities arguing that manufacturer restrictions on contract pharmacies having access at 340B drug prices have limited their savings, PhRMA was adamant that additional transparency and oversight of the 340B program and how savings were spent was necessary. Notably, during the hearing a 2024 Minnesota report was cited finding in that jurisdiction nearly one in every six dollars of 340B revenue was directed to contract pharmacies or third-party administrators. Also raised during the hearing was the anti-340B advertising campaign funded by the PAC Building America’s Future of which the Nebraska Hospital Association argued had no merit or credibility. The bill is likely to be considered at a later date by the Committee as to whether to advance to the full Chamber for consideration. The same lawmakers attempted to move a similar measure in 2024 to no avail.
New Mexico
Senate seeks to move behavioral health reform and investment. This past week, the Senate Health and Public Affairs Committee passed SBs 1, 2, and 3 out of committee. The bills would provide significant investment and reform of how behavioral health delivery systems in the state are both funded and how services are provided. The bills would provide for the following:
SB 1: Establishes a new Behavioral Health Trust Fund with an appropriation of $1 billion and a separate Behavioral Health Program Fund in the State Treasury. Funds utilized from each are intended to provide services related to behavioral health, such as treatment, expansion and improvement of infrastructure and workforce, offsetting costs to comply with federal requirements for providers, and implementation of regional behavioral health plans.
SB 2: Appropriates $140 million to 13 state agencies for grants and assistance for housing service providers and other social service entities that may render treatment or services for behavioral health patients. Authorizes $7 million to be spent by judicial districts to submit regional plans to implement tailored treatment courts and associated programs and pretrial services.
SB 3: Establishes behavioral health regions and authorizes the development of new standards for behavioral health services that are tailored to the region in which they’re being provided. The bill further establishes a universal behavioral health provider credentialing process that all Medicaid managed care organizations (MCOS) must utilize to enroll providers. It further establishes limitations on managed care organizations from implementing caps on the number of patients that a behavioral health service provider can see and be paid for if the provider has capacity.
This trio of bills is a bi-partisan initiative and is a priority for Senate lawmakers this year. The package of bills is currently up for consideration in Senate Finance but is expected to pass through and reach the floor for a Chamber vote.
New York
White House Executive Order on gendering affirming care conflicts with state law. Following an Executive Order from the White House that seeks to prohibit gender affirming care for transgender minors, New York Attorney General is reminding hospitals in the state that stopping such practices would violate state law. The federal executive order in some cases explicitly references loss of federal funds or infers loss of federal funds for hospitals that continue rendering such services. Attorney General Letitia James however wrote in a letter to hospitals that regardless of the implication pertaining to federal funds, they have an obligation to comply with New York state law which limiting access to such services may violate anti-discrimination laws. While most hospitals impacted in the immediacy are those receiving federal grant dollars, the executive order did instruct the study of whether Medicare or Medicaid dollars could be withheld to ensure hospitals complied. It’s unclear how this might proceed unless states that currently protect access to gender affirming care are able to receive an injunction on the executive order through the Court.
Governor Hochul signs legislation to protect physicians rendering telemedicine for abortion services. Following a recent Louisiana grand jury indictment against a New York physician who prescribed medication to assist in abortion care, Governor Kathy Hochul (D) signed S. 36A into law which would anonymize the names of physicians providing abortion medication as a result of a telemedicine visit. Under the measure, the name of the medical practice instead of the physician would be allowed to be displayed on any prescription label for mifepristone, misoprostol and their generic alternatives. Governor Hochul has been adamant in her disdain for any request to extradite physicians that may be subject to criminal charges or civil penalties pertaining to other states’ near total abortion prohibitions.
Rhode Island
Senate leadership intends to introduce a health care reform package. Senate leadership intends to introduce a nine-bill package that seeks reform of healthcare practices that they contend are burdensome, present barriers to patient care, and threatening to one’s financial security. Among the key legislation is SB 168, which would prohibit insurers from requiring prior authorization for any medically necessary services or prescriptions as determined by the provider. SB 171 would authorize the use of additional Medicaid funding to support graduate medical education programs and authorize expansion of the program in areas inclusive of primary care, maternal health, mental health and substance abuse treatment. SB 165 would prohibit pharmacy benefit managers from utilizing spread pricing. Finally, expected to be filed in the near future are bills that would cap the interest rate on medical debts at a rate not to exceed the average 1-week constant maturity Treasury yield and prohibit the attachment of a lien to an individual’s home. While this package of bills is likely to be utilized for messaging, it’s also likely they make it out of the Senate chamber. It’s unclear how the House at this time will reconcile the measures with their own similar measures introduced by House Democrats.
