The APTA IN Practice and Payment Specialist, Andrea Lausch, PT, DPT,  testified on HB 1271 during the 2026 session in the Senate Health Committee, reflecting the association’s 2024-2027 Strategic plan objectives to focus on advocating for fair reimbursement and reducing administrative burden. The legislation addresses key areas of payment instability that affect the physical therapy profession, including downcoding, recoupments, and rate-change notifications. It also provided an opportunity to collaborate with external stakeholders to improve these processes across all healthcare providers and services.

Effective July 1, 2026, HB 1271 limits overpayment recoupments and limits insurers from seeking recoupment of paid claims to no more 180 days (except in cases of fraud) from the date the claim was initially paid, reducing the risk of surprise clawbacks years later compared to the current two-year window. Payers may still audit claims for up to three years after payment, while providers have 180 days to report payment errors for correction.

If a payment is recouped due to a coordination-of-benefits error, providers may resubmit the claim to the correct insurer within 90 days, provided they document the original claim and the recoupment. This ensures payment for services is maintained even when billing errors occur.

The bill also prohibits retroactive reductions to CPT code reimbursement rates and requires at least 60 days’ notice before any prospective rate decreases, giving practices time to plan.

Finally, HB 1271 establishes guardrails around downcoding, ensuring it is clinically justified, transparent, and not solely automated. Human review of medical records is required, and insurers must provide clear explanations, including rationale and coding changes. Downcoding cannot be based solely on diagnosis codes or target providers treating complex patients. Providers retain the right to bill for actual services performed and have a defined appeals process with at least 180 days to appeal.

APTA Indiana remains committed to advocating for policies that protect providers and promote fair, transparent reimbursement. By engaging in legislation like HB 1271, the association helps ensure physical therapists can focus on patient care while reducing administrative burdens and financial uncertainty.