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 6739 NOTE PREPARED: Jan 31, 2024
BILL NUMBER: HB 1200 BILL AMENDED: Jan 31, 2024
SUBJECT: State Employee Health Plan Payment Limits.
FIRST AUTHOR: Rep. McGuire BILL STATUS: 2nd Reading - 1st House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: The bill limits the amount that a state employee health plan (SEHP) may pay for
a medical facility service provided to a covered individual to:
(1) the lesser of the amount of compensation established by the network plan or 200% of
the amount paid by the Medicare program for that type of medical facility service or for a
medical facility service of a similar type, if the medical facility service is provided by an in
network provider; and
(2) 185% of the amount paid by the Medicare program for that type of medical facility
service or for a medical facility service of a similar type, if the medical facility service is
provided by an out of network provider.
It provides that a provider, after receiving payment from an SEHP for a medical facility service provided to
a covered individual, is prohibited from charging the covered individual an additional amount, other than cost
sharing amounts authorized by the terms of the SEHP.
It also provides that a determination of the State Personnel Department (SPD), an SEHP, or a firm providing
administrative services to an SEHP that a medical facility service provided to a covered individual is of a
type similar to a particular type of medical facility service covered by the Medicare program is conclusive.
This bill requires a medical facility that provides drugs to a covered individual, in billing an SEHP for the
cost of the drugs, to include in the billing the same "TB" or "JG" modifier that the medical facility would
include in the billing if the medical facility were billing the Medicare program for the drugs.
HB 1200 1 Effective Date: July 1, 2024.
Explanation of State Expenditures: (Revised) The SEHP’s reimbursement of medical facility services at
200% Medicare could reduce total reimbursement for hospital facility services by $84.3 M per fiscal year,
based on an estimate prepared by the State Personnel Department (SPD) using the services billed on
institutional form from Indiana hospitals.
The SPD or its contracted third party administrator will have an increased workload to determine similar
medical facility services between Medicare (a program primarily designed for elderly and disabled
individuals) and the services provided to SEHP members and their dependents. The SPD states they will need
one dedicated analyst for implementation, monitoring, and auditing of the program with an estimated salary
and benefits of $82,000.
Additional Information - The SPD reviewed CY 2022 inpatient and outpatient claims, repricing the claims
based on the individual hospital’s Medicare reimbursement formula. As of December 2023, the SPD had 18
vacant positions with available salary ranging between $1 M and $1.5 M for those positions.
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues: Locally owned hospitals that provide services to SEHP members and their
dependents may receive less revenue from services provided.
State Agencies Affected:
Local Agencies Affected:
Information Sources: Christy Tittle, SPD; Susan Barnhart, SPD; Staffing Table, December 2023.
Fiscal Analyst: Karen Rossen, 317-234-2106.
HB 1200 2