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Legislative Report

February 20, 2015

In This Issue

General Assembly Overview
Sales Tax on Services
Unclaimed Life Insurance Benefits
HERO Plans
Dental and Optometry Service
Use of Investigational Drugs
Coverage of Prescription Eye Drops
Inmates and Medicaid
Medical Malpractice
No Pay, No Play
The Budget

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The House Republicans released their version of the state
biennial budget in Ways & Means this week. Chairman Tim
Brown (R-Crawfordsville) introduced his amendment to HB 1001
in the Ways & Means Committee. The House Republican
budget priorities include a focus on fiscal integrity, investing in
education and prioritizing public safety. As it stands now, K-12
education receives 52% of the biennial budget appropriations,
an increase of $469M (4.7%). Of course, just exactly how the K12 dollars are allocated across the state will be debated the
rest of session. The House Republican budget maintains a
reserve balance both years of the biennium. On the public
safety side, the budget allocates $80M over the biennium for
investments in local corrections programming and capacity
building. To view the fiscal impact statement, please click
here. Also, to view the House Republican summary of the
budget please click here.

A proposal to repeal the state law that sets wages for public
construction projects was approved Tuesday in the House
Employment, Labor and Pensions Committee. HB 1019 repeals
Follow Bose Public Affairs Group on
the common construction wage statute in Indiana. Indiana’s
common construction wage is a wage determination statute
Get timely updates on the legislative more broadly referred to as a prevailing wage. In Indiana,
session by following the Bose Public common construction wages are adopted in public hearings
Affairs Group on Twitter @BosePAG or of Common Construction Wage committees. Each committee
is charged with considering county-specific wage data from
the AFL-CIO, the Associated Builders and Contractors (ABC),
and other interested parties to determine wage rates
appropriate to the county where the project is located. The
Indiana Department of Labor provides assistance to these
Supporters of the measure agree that the preponderance of
literature on prevailing wage requirements suggests that they
increase labor costs in state and local public works projects.
Supporters of the repeal say it would save an estimated 10

percent to 20 percent on public construction projects by
allowing more contractors to pay wages below union scale.
However, the opposition argues that the current law
contributes to the state having a stable, well-trained labor
force by preventing low-wage contractors from underbidding
on projects. The bill would eliminate the committees that set
construction wages for each state or local government project
costing more than $350,000.
The Sunday alcohol sales bill was up for second reading
amendment on the House floor this week. As reported last
week, HB 1624 underwent significant changes in the House
Public Policy Committee, much to the dismay of grocery, drug
and convenience stores. As amended in committee, the bill
places many restrictions on the affected retailers, but not
package liquor stores. The most controversial proposals include
the placement of spirits behind a counter and a segregated
area of the store where beer and wine may be sold. The
grocery, drug and convenience store coalition, called Hoosiers
for Sunday Sales, pushed for a second reading amendment on
the House floor sponsored by Majority Floor Leader Rep. Jud
McMillin (R-Brookville). Rep. McMillin’s amendment would have
required new restrictions on grocery, drug and convenience
stores: mandatory security caps on spirits, mandatory video
surveillance of the alcohol sales area, mandatory behind-thecounter sales of all spirits less than 100ml (mini-bottles), and the
sale of alcohol limited to one area of the sales floor. McMillin’s
amendment #1 was narrowly defeated by a vote of 45-47. HB
1624 will be on the House calendar for a final third reading
vote on Monday next week.
Gaming issues were also on the table this week. HB 1540 was
voted out of the House Ways & Means Committee by a vote of
20-3. Among major provisions, HB 1540 authorizes table games
at the state’s two racinos and would allow riverboat casinos to
move onto land. Owners of the state’s ten riverboat casinos
have pushed for many years for the ability to move onto land
citing the construction of better facilities that could attract
more customers. However, another major change occurred in
Ways & Means as the bill was amended to eliminate the
admissions taxes now paid by the casinos and adjusting
wagering taxes so that the smaller casinos would see
significant savings. Anticipated losses in state tax revenue
under the changes would be offset by eliminating a $48 million
state subsidy for local government agreements with the
casinos for tax payments. The drop in local tax revenue will
certainly be heavily debated as the bill is discussed on the
House floor next week.
At this point we have now reached the committee deadline
for the first half of session. Next week we will be dealing with
second reading amendments and third reading votes on the
House and Senate floor. All second reading bills must be

engrossed by February 24 in order to proceed to third reading.
February 25 marks the third reading deadline in the House and
Senate for the first half of session. The General Assembly will not
be in session on February 26 and 27, and will reconvene for the
second half of session on March 2.

Sen. Michael Young (R-Indianapolis) has filed SB 560, which allows for
sales tax to be imposed on all transactions except for legal services,
health or mental health services. The bill also eliminates property
taxes on primary residences (homesteads) and business personal
property. The bill did not receive a hearing and is technically dead
for the session.

HB 1298, authored by Rep. Jerry Torr (R-Carmel), permits the Indiana
Public Employer’s Plan (a nonprofit, self-funded Workers’
Compensation program for Indiana public entity employers) to
convert to a mutual insurance company, subject to approval by the
Indiana Department of Insurance. The bill was amended in
committee last week to ensure that proper procedures are
performed and take place during the transition process to the newly
formed mutual insurance company. As amended, the bill passed
out of Committee and the full House unanimously. Senator Holdman
is the Senate Sponsor.

SB 425 was amended in the Senate Insurance & Financial Institutions
Committee yesterday in a manner which would change IC 27-2-23 so
that DMF searches must only be conducted on a prospective basis.
The removal of the fuzzy match language also remains in the bill. As
amended, the bill passed out of committee by a vote of 8-2.
As a result of opposition expressed by the AG’s office, I think we’ll see
a second reading amendment next week ensuring that this law will
not impact the AG’s ability to audit insurance companies under the
Indiana Unclaimed Property Act. The bill is eligible for second
reading on Monday.


HB 1279, authored by Rep. Matt Lehman (R-Berne), establishes a
state-assisted retirement plan for private employers and employees.
Provides that a newly created state board will oversee the plan and
the manager of the plan will be contracted out to a third party.
Employers can participate in the plan only if the employer does not
offer its employees a pension or retirement system of any kind. Sen.
Greg Walker has filed SB 555, a companion to HB 1279.
As reported earlier, Rep. Lehman released a revised draft of the bill
which changes it from a state-run plan to a website portal. As a
result of receiving many requests for substantive changes to the
portal concept, Rep. Lehman decided not to move forward with the
bill this year. As a result of this bill and SB 555 not receiving
committee hearings, they are dead for the session.

HB 1063, authored by Rep. Ron Bacon (R-Chandler), prohibits dental
and vision insurers and health maintenance organizations from
requiring dentists and optometrists to accept certain payments unless
the health care services are covered services. The bill also prohibits
dentists and optometrists from charging for noncovered services an
amount that exceeds the usual and customary charges for the
services. HB 1063 did not receive a hearing in the first half of session
and HB 1063 is dead. We will remain alert for any amendments the
second half of session on this topic.

HB 1065, is authored by Rep. Wes Culver (R-Goshen). HB 1065
provides that a manufacturer of an investigational drug, biological
product, or device may make the drug, biological product, or
device available to a patient who meets certain requirements. The
bill also adds to the requirements concerning experimental or
nonconventional medical treatment the authority to allow a patient
to receive an experimental or nonconventional medical treatment if
a physician determines that the patient: (1) has been diagnosed with
a terminal disease or condition; and (2) does not have comparable
or satisfactory treatment options.
The bill passed unanimously out of the House (98-0) and included an
amendment which indicates that the proposed law does not create
a cause of action against a physician, pharmacist, or hospital for the
use of an investigational drug, biological product, or device by a
patient for any harm to the patient from the drug, product or device.
HB 1065 now heads to the Senate for further discussion where it is
sponsored by Sen. Ed Charbonneau (R-Valparaiso).

HB 1451, authored by Rep. Steve Davisson (R-Salem), includes
telemedicine services within the health care consent law. The bill
provides for coverage of telemedicine services under a policy of
accident and sickness insurance and a health maintenance
organization contract. After extensive testimony, the bill did not
receive committee approval for the first half of session.

SB 26, authored by Sen. Pat Miller (R-Indianapolis), requires that
beginning January 1, 2016, certain state employee health plans,
policies of accident and sickness insurance, and health
maintenance organization contracts must cover refills and additional
units of prescription eye drops under specified conditions. This bill
came as a result of the interim committee on public health,
behavioral health, and human services.
SB 26 is estimated to increase state expenditures between $51,000
and $131,000 during CY 2016. This increase is attributable to (1)
additional expenditures between $50,000 and $80,000 for changes to
the state employee health plan and (2) additional expenditures of
$51,000 to financing state-mandated coverage for prescription eye
drops under the federal Affordable Care Act (ACA).
SB 26 passed the Senate by a vote of 50-0. House Public Health
Committee Chairman Rep. Ed Clere (R-New Albany) will sponsor SB
26 in the House.

In an effort to address the cost of inmate healthcare, Sen. Pat Miller
(R-Indianapolis) has introduced SB 212. This bill makes the
Department of Correction (DOC) an inmate's authorized
representative for applying for Medicaid for inmates who are
potentially eligible for Medicaid and who incur medical care
expenses that are not otherwise reimbursable. The bill requires the
DOC and the Office of the Secretary of Family and Social Services
(FSSA) to enter into an agreement in which the DOC pays the state
share of the Medicaid costs incurred for the inmate.
The bill also allows a sheriff to apply on behalf of a lawfully detained
individual for Medicaid and act as the person's Medicaid
representative if the sheriff enters into an agreement with the FSSA to
pay the state share of the Medicaid costs incurred for the person.
SB 212 passed the Senate this week unanimously 49-0. Rep. Ed Clere
(R-New Albany) will sponsor SB 212 in the House.

Two bills dealing with medical malpractice have been filed this year:
SB 55, authored by Sen. Brent Steele (R-Bedford), and HB 1043,

authored by Rep. Jerry Torr (R-Carmel). As introduced, each bill varies
in detail.
SB 55, as amended permitted a patient to bring an action against a
health care provider without submitting the complaint to the medical
review board if: (1) the amount of the claim is not more than $15,000;
(2) the cause of action is based on the removal of the wrong body
part; or (3) the cause of action is based on the existence of a foreign
object in the patient's body. (Under current law, a patient may bring
a direct action only if the amount is not more than $15,000). SB 55
was DEFEATED on the Senate floor this week by a vote of 22-27.
HB 1043 increases the medical malpractice cap from $1,250,000 to
$1,650,000 for claims arising after June 30, 2015. The bill also provides
that payments from the patient's compensation fund are to be
disbursed not later than 60 days after the issuance of a final, nonappealable judgment. It increases pay for medical review panel
members from $350 to $500. Increases potential pay for the medical
review panel chairperson from $2,000 to $2,500. It also increases the
maximum potential liability of a qualified health care provider for an
occurrence of malpractice from $250,000 to: (1) $300,000; or (2)
$400,000 if the action against the health care provider results in a
final judgment in favor of the plaintiff. HB 1043 eliminates provisions
under which the liability of a qualified health care provider or the
qualified health care provider's insurer could be discharged through
a periodic payments agreement under which the cost borne by the
qualified health care provider or the qualified health care provider's
insurer (consisting of the present payment and the cost of future
payments) could be less than the cost of discharging the liability
solely through an immediate payment.
This bill was heard and passed out of the House Judiciary Committee
this week by a vote of 9-2. HB 1043 will be on the House second
reading calendar for further amendment next week.

HB 1192, authored by Rep. Kevin Mahan (R-Hartford City), provides
that an uninsured motorist is not entitled to collect non-economic
damages when involved in a motor vehicle accident. The bill was
amended in committee to provide that the application of this law
would only apply to those who have had a previous violation. As
amended, the bill passed out of Committee unanimously. The bill
passed out of the House 93-1. Senator Holdman and Senator Steele
are the Senate Sponsors.

SB 347, (the Uber bill) as well as HB 1278 (the insurance industry
preferred version), passed their respective houses several weeks ago
and remain idle until the second half of session starts. Stay tuned.

As reported above in the General Assembly Overview, the budget
bill was released this week. The introduced version included an
appropriation for “Regional Cities” to be funded in part by the IDOI in
amount of $20,000,000 over the next two years. The bill was
amended in Ways and Means Committee yesterday and removed
the IDOI (as well as the DFI, Underground Storage Tank Fund, and
Enterprise Zone Fund) from the funding formula. As amended, the bill
passed out of Committee by a vote of 15-7.

For more information
Trent Hahn
Telephone: 317/684-5400
Fax: 317/684-5432