by Whitney Downard, Indiana Capital Chronicle
June 13, 2024
A high-ranking senator accused the state’s leading hospital lobbying organization of being “responsible for the gradual breakdown of trust” between lawmakers and hospital systems after the most recent legislative session, as documented in a four-page letter shared with the Indiana Capital Chronicle.
Sen. Chris Garten, a Republican from Charlestown, wrote that some legislators had described the Indiana Hospital Association (IHA) as “arrogant” and “disingenuous.”
The letter, addressed to the IHA’s board of directors, named former organization president Brian Tabor, who stepped down earlier this year. In a statement, Tabor maintained that his decision predated the March letter and wasn’t related to Garten’s comments.
The sometimes brash Senate majority floor leader has built a reputation for grilling various state agencies and others on regulatory details and project costs, most notably with the Indiana Gaming Commission. More recently, he questioned licensing delays and welcome center expenses during a lengthy State Budget Committee meeting.
In an interview, however, Garten struck a more conciliatory tone. Both sides were quick to emphasize a continued commitment to working together.
But the exchange casts a shadow on the 2025 legislative session.
Lawmakers plan to tackle health care pricing, ongoing Medicaid expenses and potentially the oft-debated Hospital Assessment Fee. Hospitals would like to alter the fee’s current structure, which offsets Healthy Indiana Plan 2.0 expenses, in a way that they say will benefit both health systems and state government.
Contents of the letter
Garten has spearheaded several legislative efforts related to hospitals and also chaired the interim Health Care Cost Oversight Task Force, which relied upon and utilized testimony from IHA. He was the Senate sponsor on a disputed proposal that he cited in his letter.
House Enrolled Act 1004 in 2023, tracking hospital pricing compared to Medicare prices, elicited pushback from Tabor and others.
“My colleagues and I met weekly with representatives from different hospitals and/or IHA to discuss their concerns about the policy we were implementing. Amidst the multiple versions of the bill and several amendments, I consistently gave IHA the opportunity to review language before it was shared with my legislative colleagues to provide your organization with time to submit feedback because I believe their intentions to be pure, despite that fact that conversations between IHA and other members of my caucus had grown contentious,” Garten wrote in the letter.
Garten said people on both sides of the issue made concessions but he was “taken aback” by IHA’s mass emails and public messaging following the bill’s ultimate passage.
Though the organization has consistently downplayed research from the RAND Corp. ranking Indiana’s hospital prices as among the nation’s most expensive, Garten said IHA has used RAND research to support other causes.
“For many in my caucus, this was indicative of the type of games they had seen IHA play in the past, but for me, it was the first real signal of organizational insincerity — I absolutely took note,” he wrote.
Garten’s letter indicates that the perceived “hypocritical messaging” on RAND was a topic of a “candid conversation” between he and Tabor on August 7, 2023, prior to meetings of the health care costs task force.
Both parties “committed to moving forward on a good note,” Garten wrote, which he said he demonstrated by granting early access to committee agendas and limiting the publication of certain data related to hospital reporting.
The final committee report seeded four bills during the 2024 session, one of which became law: Senate Bill 9. The unsuccessful proposals include Senate Bill 257, Senate Bill 258 and House Bill 1327.
Senate Bills 257 and 258 were shared in advance with IHA staff, Garten said, adding that a staffer worked behind the scenes to ensure bills weren’t heard in committee without consulting Garten.
The proposals would have given third party administrators and pharmacy benefit managers a fiduciary duty to insurance sponsors and prohibited physician compensation for in-system referrals, respectively. House Bill 1327 would have required health care entities to report a breakdown of their ownership data.
Health care committee adopts final report, targets prior authorizations
On Senate Bill 9, Garten said he “accommodated many of their requests” in bill amendments, including defining “health care entity” and “acquisition” alongside confidentiality requirements. The underlying bill, which passed, requires health systems notify the Office of Attorney General of a planned merger or acquisition.
“I believed that these edits … would extend across the hallway when SB 9 was in the House, and yet IHA spearheaded a coordinated effort to kill the bill once they felt my attention was diverted elsewhere. This is disingenuous behavior and bad business,” Garten wrote. “Let me be clear, I have no issue with IHA (or any other group) voicing opposition for legislation that they feel is counterproductive to the success of their industry. In fact, I welcome it — stakeholder input directly correlates to better bills for Hoosiers. That is not the issue here.”
Instead, he said that his experience with IHA’s representatives was not uncommon among lawmakers but that such repeated instances prevented the two parties from having “honest, productive conversation for the betterment of Hoosiers and those who choose to do business in our great state.”
“There is a deep divide between legislators and hospitals because of the way IHA continues to conduct itself, and it would go a long way toward mending that relationship if the board and each hospital would discourage this type of behavior,” Garten wrote.
He concluded by emphasizing a commitment to working with hospitals to lower health care costs, saying that he had great conversations with individual hospitals.
Three months later
Garten said in an interview that the legislature’s relationship with IHA has improved since sending the letter.
“As I continue to navigate the health care space, I found it more and more difficult to really have a very candid conversation with folks on the other side of some of these issues … For me, that’s key,” Garten said. “… I remain open and optimistic about 2025 and the upcoming session and, frankly, the already improved communication between legislation and hospitals and the leadership at Indiana Hospital Association.
“I think we all share the same goals: we want to deliver good quality health care to Hoosiers at the most competitive prices possible. And you know, maybe we’re going to have some debates along the way on how we get there, but I think the goals are shared goals.”
An IHA statement from current leadership noted the role it plays in crafting legislative proposals related to hospitals and voicing concerns about potential actions.
“IHA and the 170 hospitals we represent have a long-standing mission of providing high quality care to all Hoosiers 24 hours a day, 7 days a week,” board chair Steve Holman said. Holman is also the president and CEO of Union Health in Terre Haute.
“We value our relationship with the Indiana General Assembly and are committed to maintaining a high degree of trust with our elected officials. As we transition to new leadership, we look forward to an open, constructive dialogue with lawmakers as we work together to protect access to care and improve the health of Hoosiers,” the statement concluded.
Implications for 2025
The biggest change for the 2025 legislation session, slated to begin in January, will be the absence of Tabor, who has served as president of the association since 2016. His previous policy roles with IHA — as well as the Indiana General Assembly and the Indiana Association of REALTORS — made him a long-standing presence at the Indiana Statehouse.
“My decision to step away from my role as president was made before the end of the 2024 session. It took weeks of developing a transition timeline with our leadership before IHA announced it, but I had already shared my plans with many close to me long before it became public,” Tabor said in a statement.
The 2025 session will likely be a tough initiation for Tabor’s eventual successor, as the General Assembly revisits hospital regulations, pricing concerns and anti-monopoly efforts.
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“It doesn’t matter if you’re a Democrat, Republican, independent, liberal, conservative — it makes no difference,” Garten said in an interview. “At some point, you’re going to need health care in Indiana.”
Different factions don’t agree on the best way to address the state’s high costs and provider shortages. Federal regulations on insurance plans and opaque drug pricing negotiations handled by Pharmacy Benefit Managers (PBMs) further complicate the health care space — not to mention that Indiana will have a new governor with their own health care priorities.
“The reality is, health care costs aren’t going down and hospitals aren’t solely to blame for that. There’s a very long pipeline of integrated health care entities top to bottom,” Garten said. “… This pipeline is wrought with, I think, a lot of opportunity to really improve the system, improve outcomes in the health care space — but also improve price as well. And I think we do that through free market principles and competition … with creating a little more transparency in this space.”
