Indiana Implements Major Medicaid Overhaul for Nursing Facilities and Community-Based Services
Indiana enacted House Enrolled Act 1277, restructuring its Medicaid program for long-term care and community-based services, with most provisions effective July 1, 2026. Starting July 1, 2027, nursing facility residents who have stayed 100 consecutive days will transition from managed care to fee-for-service Medicaid coverage. The law also requires the state to seek federal approval for a dedicated Medicaid waiver for assisted living services to serve seniors meeting nursing facility care requirements.
Indiana's reform law reshapes how the state finances long-term care by shifting certain residents away from managed care arrangements. Starting in 2027, nursing facility residents who remain in care for at least 100 consecutive days will move to traditional fee-for-service coverage, potentially altering payment dynamics and administrative processes for facilities and insurers.
The legislation also directs state officials to pursue federal authorization for a specialized Medicaid waiver program focused on assisted living facilities. This would serve older adults who need nursing-level support but prefer residential care settings, and would allow these individuals flexibility in choosing who coordinates their healthcare services.
The changes could affect thousands of seniors currently relying on Medicaid-funded long-term care in Indiana. Nursing facilities may experience administrative adjustments as residents transition to fee-for-service coverage, while assisted living providers could gain expanded access to Medicaid funding if the waiver gains approval. Stricter cost controls and documentation requirements may influence how providers deliver and bill for services, potentially affecting care quality and operational costs across the sector.