Weekly StateVitals Update: Volume 8 (February 24, 2025)
Arkansas
Senate adopts reform to vision benefit plans. Following passage by the House earlier this month a hearing in Senate Insurance and Commerce, HB 1353 passed the Senate this past week. Left unamended throughout the legislative process, the measure installs numerous limitations on how vision insurers and health plans may engage and contract with providers. Such limitations include requiring 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. The bill now heads to the Governors desk for signature. Of note, the bill is similar in nature to a 2023 measure passed in Texas (HB 1696), which is currently enjoined and tied up in litigation before the Fifth Circuit Court of Appeals.
Florida
Senate committee passes step therapy prohibition. The Senate Health Policy Committee unanimously approved SB 264 sponsored by Senator Gayle Harrell (R-Stuart). The measure would prohibit the Medicaid program from using step therapy as a utilization management tool for treatment of serious mental illnesses, inclusive of but not limited to bipolar disorders, major depressive disorders and obsessive compulsive disorders. For Medicaid managed care organizations, the measure also includes a guarantee that the impact of removing step therapy from treatment for these diagnoses will be built into the rates. The bill’s language is not unfamiliar as it has been a common theme in recent years by states to limit prior authorization or step therapy processes for prescription drugs that treat serious mental illnesses, often pushed by stakeholders inclusive of providers, consumer advocacy groups, and The Kennedy Forum. The bill will now head to the Senate Appropriations Committee on Health and Human Services for consideration before the Legislature begins its work in March.
Idaho
Threat to Medicaid expansion passes House. HB 138 made its way through the House this past week by a narrow margin of 38-32. The measure would require the Medicaid expansion program to adhere to a number of restrictions in order to continue operating. As passed by the House, the key restrictions imposed would be:
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;
Implement work requirements for all able-bodied adults enrolled in the expansion program, inclusive of requiring 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;
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; and
Intends to implement a lifetime benefit limit of 36 months for individuals enrolled in the expansion eligible category.
The bill would further seek to implement improper payment controls and ensure that rate was at 5% of less and require eligibility redeterminations at least twice annually. Uniquely, and a proposal that has been floated in other states in the past, it would offer Medicaid enrollees above 100 percent of the federal poverty level to instead opt for federally subsidized health insurance on the Marketplace instead of enrolling in Medicaid. The state estimates a savings of between $109 million and $163 million depending on whether the program is repealed or the restrictions of the bill are implemented. However, the Idaho House Minority Leader has argued it would cost the state more to repeal the program (approximately $30 to $40 million) than to retain the program as is. It now heads to the Senate for consideration.
Illinois
Governor Pritzker highlights healthcare reform in State of the State. Governor JB Pritzker (D) delivered his seventh State of the State and Budget address this past week. In it, the Governor highlighted a number of healthcare reform efforts that he is spearheading this year. His first priority is the Prescription Drug Affordability Act he intends to introduce. The measure seeks to protect independent pharmacies by mitigating what he calls unfair practices by pharmacy benefit managers (PBMs) and providing the Illinois Department of Insurance authority to review records of PBMs, inclusive of requiring annual reporting and auditing. Additionally, the Governor intends to advocate for legislation that would ban prior authorization for all behavioral healthcare, building from his effort last year to prohibit prior authorization for inpatient behavioral health admissions. Finally, the Governor highlighted an effort to require insurers to reimburse for reasonable travel costs tied to medical appointments when the distance a patient travels exceeds network adequacy requirements.
In addition to his State of the State address, the Governor also released his proposed $55.2 billion budget for FY 2026. The Governor is proposing to eliminate the Health Benefits for Immigrant Adults program, which provides Medicaid-like healthcare coverage for immigrants without legal status and who are between the ages of 42 and 64. It’s highly likely the House Democrats will be proactive to push back on that proposal and seek to find savings in the budget elsewhere.
Indiana
Senate adopts Medicaid reform bill. Highlighted as a priority for Senate Republicans at the beginning of the session, the Senate voted 40 to 9 to pass SB 2 this past week. The measure includes numerous reforms to the Medicaid program to enhance oversight and transparency, establish limitations on eligibility and spending, and to reduce fraud, waste and abuse. Notably, provisions include:
Requires the Medicaid Oversight Committee to be provided an annual report on improper Medicaid payments and expenditures, recovered funds and other data elements pertaining to fraud.
Prohibits state agencies and contractors and other affiliated entities from marketing the Medicaid program.
Prohibits Medicaid applicants from providing only self-attestation of meeting eligibility criteria.
Requires the state to provide hospitals with performance standards that they may use in making presumptive eligibility determinations.
Establishes work requirements for the Medicaid expansion population of twenty hours per week, with certain alternative pathways provided relative to exemptions, volunteering or medical treatment programs.
Establishes a poison pill for the Medicaid expansion program that if federal financial participation ever falls below 90 percent, the program may be terminated.
Caps enrollment of the Medicaid expansion population to the lesser of the number of individuals that ensures financial participation does not exceed the level of state appropriations or 500,000 enrollees.
Currently, enrollment in the Medicaid expansion population is at approximately 700,000 enrollees. The measure includes other elements relative to Medicaid operations and transparency requirements. It’s now headed to the House for consideration.
Houses passes health care utilization management and reimbursement reform. The House voted to adopt HB 1003 this past week. As previously highlighted, this measure has a litany of provisions impacting how providers are reimbursed or what they can charge patients. Following amendment by the House, key provisions of the bill include:
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.
Among other concerns, providers continue to highlight the site neutrality provisions and 340B requirements as deleterious to small and rural hospitals’ ability to drive any type of margin. As it moves to the Senate, it’s sponsored by Senator Ed Charbonneau, Chair of the Health and Provider Services Committee and Senator Tyler Johnson. In the House, it had the support of House Majority Floor Leader Matt Lehman.
Kansas
Legislature overrides veto on gender-affirming care ban. Following Governor Laura Kelly’s (D) veto of SB 63 two weeks ago, the Legislature opted to override the veto this past week with only one republican voting against overturning the veto. The measure will prohibit medical interventions, inclusive of surgeries and hormone treatment, for individuals under the age of 18 seeking gender affirming care. It notably will also restrict state employees from promoting social transitioning for transgender youth. In the veto message, the Governor criticized the effort for interfering in medical decisions that should be made by parents and their children. Moving forward, the new law is set to take effect before the end of February. However, the measure is likely to face legal challenge in state court to its constitutionality given a decision in a 2017 state supreme court case involving the right to abortion care that concluded a person’s right to personal autonomy in their healthcare. Advocates argue the parallels are evident in this same case. It remains likely either parents or providers will file suit to block the law from becoming effective.
Maryland
General Assembly moves companion bills extending marketplace subsidies to young adults. The Senate and the House both passed companion bills (HB 297 | SB 5) to the opposite chambers this past week. The measure would provide state-based subsidies for individuals to enroll on the state-based exchange if they are age 18 to 37 and are at or below 400 percent of the federal poverty level. Utilizing a reinsurance fund, the program would be funded through 2028 and is meant to offer some support in lieu of Congress likely opting not to extend the enhanced Advance Premium Tax Credits authorized during the COVID-19 public health emergency. Notably, the program had previously been in existence as a pilot program to incentivize enhanced enrollment among young adults to create a more balanced risk pool. The pilot program was originally set to expire in 2026. Both chambers are now expected to move the respective companion bills to the Governor’s desk.
House passes PDAB measure. The House of Representatives passed HB 424 over to the Senate for consideration this past week. The measure would expand upper payment limit (UPL) setting authority for the state’s Prescription Drug Affordability Board (PDAB). Implementing the PDAB’s UPL Action Plan previously approved by the Legislative Policy Committee this past fall, the PDAB would be authorized to set UPLs for all purchases and payor reimbursements of prescription drug products in the state that the PDAB determines have led or will lead to affordability challenges. Currently, the PDAB only has UPL authority for purchases made for or by state and local governments and Medicaid. As part of the legislation, the PDAB would be required to consider how a UPL may impact 340B covered entities before taking action. It would also limit the use of a UPL for drugs in short supply. The Senate will now take up the measure through the committee process for consideration.
Mississippi
House passes measure authorizing full practice authority for APRNs. This past week, the Mississippi House of Representatives passed HB 849. Sponsored by Rep. Sam Creekmore (R-New Albany), Chair of the House Public Health Committee, the measure would authorize advanced practice registered nurses (APRNs) to treat patients outside of a collaborative agreement with a physician if the APRN has accrued 8,000 hours of experience within a collaborative agreement. The intent of the measure is to stretch the workforce to rural and historically underserved areas. Under existing law, there is no supervision requirement but there is a requirement that a collaborating physician must review 10 percent of the APRNs’ charts and treatment plans once per month. Under the APRN title includes nurse practitioners, certified nurse specialists, nurse midwives and certified nurse anesthetists. Before the measure passed the House, an amendment was adopted that conditions implementation of the bill on increasing the Rural Physician Scholarship Program in the state to 100 slots at an estimated cost of $1.2 million. The bill is now headed to the Senate for consideration.
Missouri
Abortion care facility licensure requirements struck down in court. A Kansas City circuit court judge, Jerri Zhang, issued a new ruling recently that strikes down a previously significant barrier to health care facilities offering abortion care services in the state. Under state law, 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. Under the ruling, Judge Jerri Zhang concluded that the licensing requirement is “facially discriminatory because it does not treat services provided in abortion facilities the same as other types of similarly situated health care.” Missouri Senate Republicans have iterated their priority this session to put the question of whether abortion should be legal back on the ballot in 2026.
Montana
Medicaid expansion renewal bill continues its trek in the Senate. Following passage by the House last week, HB 245 passed out of the Senate Public Health, Welfare and Safety Committee by a vote of 6 to 5. The measure removes the sunset date on the Medicaid expansion program and largely keeps the program in-tact as it currently operates. The previous week, the Senate voted against SB 62. The measure would have implemented a phase out of Medicaid expansion by prohibiting any new enrollments to the program and allow existing enrollees to remain on the program until they were no longer eligible. HB 245 will now head to the floor for consideration.
New Mexico
Behavioral health reform package passes Senate. The House passed SBs 1 and 2 this past week which were championed by Senate Majority Leadership and seek to reform behavioral health care resource delivery and investment in the state. As previously summarized in the past two Weekly StateVitals Update, SBs 1, 2, and 3 found widespread bipartisan support in the Senate and Democratic support in the House for SBs 1 and 3. The measures in brief summary would:
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.
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.
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 House is still waiting to take up SB 2 for the appropriations necessary to implement SB 1 and 3 but it is expected to similarly pass in some form with majority support.
Texas
Attorney General supports bill to limit insurers’ use of certain PBMs. Rep. Cody Harris (R-Palestine) introduced HB 2750 in recent weeks to prohibit insurers from requiring its enrollees to utilize a pharmacy benefit manager (PBM) of which the insurer has a financial interest in. Notably, Rep. Harris was the same sponsor of now Texas law that established anti-PBM steering practices in past years. He has been instrumental in driving enhanced dialogue about how self-insured plans should be overseen in some part by state governments, inclusive of how this bill intends to establish limitations. In filing the measure, Texas Attorney General Ken Paxton this past week came out in support of the measure. This comes following an opinion from the Attorney General that two PBM reform bills enacted in 2021, including Rep. Harris’s measure, do in fact apply to PBMs serving ERISA plans. Whether the bill gains traction as the session gets moving quickly this month is unknown.
Virginia
House passes prior authorization reform. Following the past two months of negotiation, the General Assembly passed HB 2099. The measure establishes requirements that must be built into contract between providers and payors relative to prior authorization requirements. Notably, the bill includes requirements pertaining to:
Insurers must provide a response to a prior authorization request within 72 hours for an expedited request;
Insurers must provide a response to a prior authorization request within seven calendar days for non-expedited requests;
Prohibits insurers from revoking, limiting, modifying or restricting a prior authorization previously approved for services that have already been scheduled or provided the enrollee consistent with the authorization unless certain conditions are met; and
Requires insurers to publish a list of all services or products requiring prior authorization on their website and provide at least 30 days advance notice before any changes are made to the list.
The bill also includes elements pertaining to data reporting on prior authorization data by insurers. These elements are relatively in line with what other states have done in recent years to establish timeline requirements for prior authorization determinations and public notice of all prior authorization requirements. The bill now heads to the Governor’s desk.
West Virginia
Certificate of Need reform takes shape. Following newly inaugurated Governor Patrick Morrisey’s State of the State address, the West Virginia Hospital Association reiterated its support for keeping certificate of need (CON) laws in place. During his State of the State, Gov. Morrisey repeated his continued desire to repeal all CON laws in place in West Virginia, a campaign pledge he has iterated from when he first entered the race for Governor. West Virginia has a comparatively higher proportion of patients than other states at approximately 75% that reimburse providers at lower rates (Medicaid, Medicaid and state employee insurance plan) than commercial plans. Existing hospital systems argue that if CON processes were repealed and new providers move in, current providers would lose the proportion of commercial patients needed to have between a one to four percent margin on an annual basis and sustain services. Gov. Morrisey argues that CON processes impede free market principles from advancing health care access and affordability.
The bill introduced at the request of the Governor, SB 453, would repeal any statutory requirement of CON processes, establish a 2026 sunset date for all current CON processes, and render any previous decisions made through CON processes as having no force or effect. It’s currently sitting in the Senate Health and Human Services Committee and is expected to receive a hearing in the coming weeks.
