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 6719 NOTE PREPARED: Jan 2, 2024
BILL NUMBER: SB 164 BILL AMENDED:
SUBJECT: Federally Qualified Health Center Reimbursement.
FIRST AUTHOR: Sen. Charbonneau BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
XFEDERAL
Summary of Legislation: The bill requires the Office of the Secretary of Family and Social Services (FSSA)
to allow a federally qualified health center to elect for a separate reimbursement for pharmacy costs by
removing pharmacy costs from the facility specific prospective payment system rate.
Effective Date: July 1, 2024.
Explanation of State Expenditures: The bill will have indeterminate impact on state Medicaid pharmacy
cost for federally qualified health centers (FQHC).
The prospective payment system (PPS) reimburses a FQHC at a facility specific rate (calculated by FSSA’s
contract consultant, Myers and Stauffer) for dental and medical services. The FQHC cannot concurrently
receive a Medicaid pharmacy rebate and take advantage of other discounts that may be available on a
particular prescription drug. If the Medicaid rebate rate is built into the PPS and an FQHC decides to opt-out
of the PPS for pharmacy drugs, the FQHC may participate in the program that maximizes affordability of
prescription drugs.
Explanation of State Revenues:
Explanation of Local Expenditures: To the extent that an FQHC is a locally owned facility, the bill could
potentially reduce costs for pharmaceutical drugs.
Explanation of Local Revenues:
SB 164 1 State Agencies Affected: Office of the Secretary of Family and Social Services.
Local Agencies Affected: Some federally qualified health centers.
Information Sources:
https://www.in.gov/medicaid/providers/files/modules/federally-qualified-health-centers-and-rural-health-
clinics.pdf;
https://www.commonwealthfund.org/publications/explainer/2022/sep/federal-340b-drug-pricing-program
-what-it-is-why-its-facing-legal-challenges.
Fiscal Analyst: Karen Rossen, 317-234-2106.
SB 164 2