The Indiana Hospital Association, Indiana State Medical Association and Indiana Physicians Health Alliance are all backing a bill targeting Elevance Health’s out-of-network provider penalties, the organizations shared in a Jan. 21 news release.
The bill advanced in the state’s legislature this month. In October, Elevance opened the door to penalizing hospitals and other contracted facilities across markets “equal to 10% of the allowed amount of the facility’s claims” for using out-of-network providers. Elevance outlined exceptions for emergency services and when the insurer grants prior approval, but the company also threatened dismissal from Anthem’s networks entirely. Elevance’s policy went into effect Jan. 1, with Indiana among the 11 states affected.
“Elevance’s new policy to levy penalties on hospitals resulting from referrals to out-of-network independent physicians will have unintended consequences on many of those physicians who are dependent on their hospital relationships for referrals,” Stephen Freeland, board officer of IPHA and CEO of Cancer Care Group, said. “Patient care may be impacted in circumstances where the best medical option for the patient is an out-of-network independent physician. We strongly encourage Elevance to rescind this policy and work with providers and legislators to find reasonable solutions that address the concerns of providers and Elevance.”
Starting in July, the proposed Indiana bill would ban carriers from imposing administrative fees on facilities using out-of-network providers. Otherwise, the state insurance commissioner could penalize the insurer double the original amount.
“Doctors already navigate complex networks and heavy administrative burdens,” family physician and ISMA President Ryan Singerman, DO, said. “This adds even more pressure, forcing physicians into unfavorable contracts that may not sustain their practices.”
Elevance previously shared the following statement with Becker’s regarding its policy.
“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.”
