The American Hospital Association and Federation of American Hospitals are calling on Elevance Health to rescind a new policy that would penalize hospitals for using out-of-network providers.
In a Dec. 17 letter to Elevance President and CEO Gail Boudreaux, AHA President and CEO Rick Pollack called the policy “deeply flawed” and said Anthem “intends to impose punitive measures” on in-network hospitals.
FAH president and CEO Chip Kahn said in a Dec. 18 letter to Ms. Boudreaux that the “unfair policy will create ill will between Anthem and its in-network hospitals and will sour future provider relations – making Anthem’s physician network adequacy worse
instead of better.”
Effective Jan. 1, Anthem intends to impose a 10% administrative penalty on the allowed amount of a hospital’s claims that involve out-of-network providers, with the potential for network termination. The policy applies to Anthem Blue Cross Blue Shield commercial plans in 11 states.
In the AHA letter, Mr. Pollack wrote that “penalties and termination can be applied to hospitals under the policy even though hospitals may not own, control or manage independent providers involved in a patient’s care.”
The AHA also said the policy mirrors a “network matching” approach that Congress considered and rejected when drafting the No Surprises Act, which already protects patients from unanticipated out-of-network bills.
“Anthem’s approach would limit patients’ choice of providers and could even mislead them about where they can access care,” Mr. Pollack wrote. If Anthem fails to maintain physician coverage for an in-network hospital, he argued, “enrollees’ access to the care presented to them as in-network options could be rendered largely meaningless.”
The AHA and FAH further called the policy “fundamentally unworkable,” citing well-documented gaps in insurers’ provider directories and noting that hospitals cannot realistically verify the network status of every clinician involved in a patient’s care, especially in emergencies.
Elevance researchers noted in a December report that providers are winning about 80% of cases that reach arbitration under the No Surprises Act, with median final payments 3.72 times the qualifying payment amount.
In its letter, the AHA said that Anthem “could address many of its concerns with the IDR process by making changes in its own operations,” citing federal data indicating the insurer failed to participate in more than 30% of IDR disputes in 2024. The letter also said that Anthem “does not consistently respond to providers during the open negotiation period” established to resolve disputes before arbitration.
In a Dec. 18 letter responding to the AHA, Elevance defended the policy as “a measured and appropriate step” to address what it characterized as abuse of the IDR process. The company said the policy does not affect emergency care and exempts rural, critical access, and safety-net hospitals. Elevance argued that the disputes driving the policy are “overwhelmingly not for emergencies,” but rather scheduled procedures like plastic surgery, spine surgery, and neuromonitoring services that are often billed by private-equity-backed physician staffing companies. The insurer said its IDR case volume has increased more than 40% in 2025 compared with late 2024.
Elevance also shared the following statement with Becker’s:
“The No Surprises Act’s independent dispute arbitration (IDR) process is creating an affordability crisis due to a loophole allowing out-of-network care providers to initiate IDR for claims that are performed at in-network facilities. When the IDR process is abused, costs rise across the system – and that impacts everyone.
Elective procedures that were never meant to qualify for arbitration – like breast reductions – are now generating average IDR payments of $90,000 per case across Anthem’s markets. On average, Medicare would pay approximately $1,100 for this same service and a self-insured employer would pay about $2,400 to an in-network provider.
This surge is powered by private-equity groups and third-party billing companies that encourage out-of-network billing to secure massive arbitration windfalls. Federal agencies expected 17,000 disputes per year; instead, the system is now processing millions. None of this is sustainable, and none of it reflects what Congress intended.
We need our hospital facilities to be part of the solution, since these cases only qualify for IDR when they occur at an in-network facility. Our policy does not apply to emergency services, situations with no in-network alternative, or rural, critical access, and safety-net facilities. This policy is addressing IDR waste and abuse, protecting employer and member affordability, and restoring the NSA to its original purpose. Members will continue to have access to high-quality care, including out-of-network coverage when clinically necessary.”
