Braun administration defends Medicaid proposal expected to cost hospitals and clinics millions - Indianapolis News | Indiana Weather | Indiana Traffic | WISH-TV |

INDIANAPOLIS (WISH) – The head of the Indiana Family and Social Services Administration is defending a proposal expected to save the state millions despite warnings from hospitals and clinics. The 340B Drug Program allows certain health care providers to purchase outpatient drugs from manufacturers at a discount, then charge insurance providers for the full price. The difference is meant to fund services for low-income and uninsured patients. “It is fundamentally unfair to ask Indiana taxpayers to subsidize hospital executive salaries and construction spending,” FSSA Secretary Mitch Roob told News 8 in a statement. The FSSA has proposed a change to 340B , which would stop Indiana Medicaid programs from paying the full price for prescription drugs if health care providers are receiving a discount. The legislature authorized the change in last year’s budget vote. The FSSA said this would save $20 million, making Indiana Medicaid more viable. Indiana Hospital Association (IHA) President Scott B. Tittle has opposed the move, saying it “shifts those cuts onto Indiana hospitals and other 340B entities, jeopardizing access to care for Hoosiers.” “Drug prices have surged – creating an unsustainable burden on hospitals,” Tittle said in a statement. Neither Roob nor Tittle was immediately available for interviews. Indiana isn’t alone in trying to rein in 340B spending. Total 340B drug purchases have risen nationally from $7.2 billion in 2013 to $66.3 billion in 2023, according to KFF . Gov. Mike Braun signed an executive order last year to review the 340B program. “No federal law guarantees hospitals the right to retain revenue derived from prescriptions funded by a taxpayer‑supported program,” Roob said, directly responding to IHA’s opposition. “The proposed State Plan Amendment ensures that savings associated with Medicaid beneficiaries remain within the Medicaid program.” Hospitals claim that even if the revenue isn’t directly funding safety-net programs, it’s covering other costs that allow those programs to exist. But Roob argues it’s coming at the cost of Medicaid funding. “Indiana’s objective is straightforward: to ensure 340B operates as intended and that Medicaid dollars benefit the individuals the program is meant to serve.” It’s not just hospitals relying on 340B. Covered entities include Federally Qualified Health Centers (FQHCs) as well as specialized clinics and programs. Damien Center, Indiana’s largest HIV/AIDS service organization, said the proposed change would cost it $5 million alone. “Changing this will cause a ripple disaster effect across Indiana in health care,” Damien Center President & CEO Alan Witchey told News 8 in March. The public comment period on the proposed changes closed on March 27. When asked, the FSSA didn’t have a firm timeline on when it would announce its decision on changes to 340B. If approved, changes are effective July 1, 2026. Indiana Medicaid, which Gov. Braun has called a “broken program” , faced a $1 billion shortfall in 2023. His administration has taken aggressive steps to cut down on ballooning Medicaid spending, starting with a directive for Managed Care Entities to stop advertising Medicaid programs on television and radio. According to the FSSA’s monthly enrollment report for Feb. 2026, about 1.6 million Hoosiers are enrolled in some form of Medicaid; down 18% percent from Feb. 2025 when 1.96 million were enrolled. Statement “The Associations’ comments do not reflect the original purpose of the 340B program or the current reality of Indiana’s healthcare system. Earlier in my career, I led the Health and Hospital Corporation while it operated Wishard Hospital, then the state’s largest 340B participant. The program was created to give low-income patients access to low-cost often life-saving medications. It was not designed to increase hospital profits. “Today, virtually all low‑income Hoosiers receive prescription coverage through Medicaid, funded by manufacturer rebates. Under the current structure, when patients fill a prescription at a 340B pharmacy, Indiana Medicaid does not receive the associated rebate, and the Medicaid patient doesn’t receive lower drug prices or lower bills, even as Indiana continues to have some of the highest hospital costs in the country. “It is fundamentally unfair to ask Indiana taxpayers to subsidize hospital executive salaries and construction spending while also paying twice for the vital medications low‑income Hoosiers depend on. “No federal law guarantees hospitals the right to retain revenue derived from prescriptions funded by a taxpayer‑supported program. The proposed State Plan Amendment ensures that savings associated with Medicaid beneficiaries remain within the Medicaid program. “Indiana’s objective is straightforward: to ensure 340B operates as intended and that Medicaid dollars benefit the individuals the program is meant to serve.” Mitch Roob, secretary of Indiana Family and Social Services Administration