Cost caps central to Medicaid long-term care bill clearing Indiana Legislature

A Medicaid bill reshaping parts of Indiana’s long-term care system cleared the legislature a final time Friday and now heads to Gov. Mike Braun.

House Bill 1277 passed the House 96-0 and the Senate 46-4.

Author Rep. Brad Barrett, R-Richmond, said the final version reflects months of negotiations over costs, services and the state’s rollout of its PathWays for Aging program.

“We were trying to, really, at the end of the day, do two things. One was to put a cap on services — because we’ve seen that, sometimes, the expense of even keeping a patient at home could outspend institutionalization,” Barrett said. “And so this was a big compromise.”

Changes made on the final day of the session also rolled in language from other Medicaid measures and stripped out a provision added earlier in the process.

Senate Minority Leader Shelli Yoder, D-Bloomington, ultimately supported the measure but urged lawmakers to revisit one section next year that directs Indiana’s Family and Social Services Administration to seek federal approval for an individual cost cap tied to home- and community-based services under the state’s PathWays program.

The specific provision directs the FSSA secretary to file an amendment with the U.S. Department of Health and Human Services to establish an individual cost cap for home and community-based services under the Pathways of Aging program — not to exceed the institutional cost of nursing facility services.

Yoder cautioned that the language could carry unintended consequences if not revisited.

“There is concern that this language is, in fact, not sunsetting the individual cost cap itself once it is federally approved,” Yoder said. “I hope that Indiana never becomes a state that moves backward, once again relying more heavily on institutions for people with disabilities.”

The bill drew scrutiny earlier in the session from long-term care providers and advocates who questioned whether the broader Medicaid changes — including Indiana’s transition to the PathWays managed-care model — would actually produce savings or risk limiting access to home- and community-based services.

Lawmakers later delayed a key transition requirement and added a sunset to the individual cost cap as part of the compromise.