LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6636 NOTE PREPARED: Dec 27, 2023
BILL NUMBER: HB 1091 BILL AMENDED:
SUBJECT: Prior Authorization.
FIRST AUTHOR: Rep. Pressel BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: The bill requires, on or after January 1, 2026, health plans (plans) to allow health
professionals who have at least an 85% approval rate of prior authorization requests through a plan to receive
a one year exemption from the plan's prior authorization requirements. It provides that health professionals
have a right to an appeal of a prior authorization denial or rescission. The bill provides that the appeal is to
be conducted by a health professional of the same or similar specialty as the health professional who has or
is being considered for an exemption.
Effective Date: July 1, 2024.
Explanation of State Expenditures: Prior Authorization: The overall impact resulting from this bill is
indeterminate. Prior Authorization (PA) limits utilization, reducing claims for services paid through an
insurance plan. If utilization were to increase as a result of the response time requirements or providers
practice patterns changing after receiving a PA exemption created under the bill, claims costs would increase.
Increases in claims costs may translate into an increase in health care premiums for the state employees’
health plan or the capitation rate paid for the state’s Medicaid program.
The state employees’ health plan employs a third party administrator who, under this bill, would be
responsible to exempt providers from PA based on the evaluation of individual procedures, potentially
shifting administrative workload from issuing PAs to evaluating and tracking PA exemptions. A similar shift
in administrative workload may occur for Medicaid providers. Any increase in administrative costs will
depend on the number of administrative appeals for rescissions or errors in applying exemptions.
Any increase in premiums cost for the state employee health plans may be mitigated with adjustments to
HB 1091 1 other benefits or to employee compensation packages, or through the division of premium costs between the
state and its employees.
Medicaid and the Children’s Health Insurance Program (CHIP) are jointly funded between the state and
federal governments. The state share of costs for most Medicaid medical services for FFY 2024 is 34%, 10%
for the age 19 to 64 expansion population within the Healthy Indiana Plan (HIP), and 24% for CHIP. The
state share of most Medicaid and CHIP expenditures is paid from state General Fund appropriations, and
state dedicated funds primarily cover HIP costs.
Department of Insurance (DOI): To the extent that the DOI has oversight of provider and oversight of
insured contracts of insurers and HMOs, the DOI’s workload may increase to evaluate and resolve
complaints of noncompliance based on the provisions of the bill. [The DOI is funded through a dedicated
agency fund.]
Explanation of State Revenues: Insurance Premium Tax Revenue: If utilization were to increase as a result
of the requirements of the bill, claims costs would increase, potentially translating into an increase in health
care premiums. If overall premiums collected in the state increase, revenue to the state General Fund could
increase from either corporate Adjusted Gross Income Tax or Insurance Premium Tax collections.
Civil Actions: For disputes concerning contractual requirements, parties to the contract may file civil actions.
If additional civil cases occur and court fees are collected, revenue to the state General Fund will increase.
The total revenue per case would range between $100 and $122. The amount deposited will vary depending
on whether the case is filed in a court of record or a municipal court. The following linked document
describes the fees and distribution of the revenue: Court fees imposed in civil, probate, and small claims
cases.
Explanation of Local Expenditures: The bill’s impact on local units providing health care insurance is
indeterminate and will depend on utilization changes. If an increase in utilization leads to an increase in
premiums, the additional costs may be mitigated with adjustments to other benefits or to employee
compensation packages, or through the division of premium costs between a local unit and its employees.
Explanation of Local Revenues: If additional cases occur, revenue will be collected by certain local units.
If the case is filed in a court of record, the county will receive $32 and qualifying municipalities will receive
a share of $3. If the case is filed in a municipal court, the county receives $20, and the municipality will
receive $37. The following linked document describes the fees and distribution of the revenue: Court fees
imposed in civil, probate, and small claims cases.
State Agencies Affected: State Personnel Department; Department of Insurance; Family and Social Services
Administration.
Local Agencies Affected: Trial courts, city and town courts. Local units offering health care insurance; trial
courts, city and town courts.
Information Sources: Indiana Supreme Court, Indiana Trial Court Fee Manual.
Fiscal Analyst: Jasmine Noel, 317-234-1360.
HB 1091 2