Indiana lawmakers have passed legislation banning health insurers from penalizing hospitals for using out-of-network providers, a direct rebuke of Elevance Health in its home state.
The bill received final legislative approval on Feb. 26 and now heads to Gov. Mike Braun, where it will be effective upon signing.
The legislation targets a policy from Elevance that went into effect this year and imposed a 10% reimbursement cut on facility claims involving out-of-network clinicians for Anthem Blue Cross Blue Shield commercial plans across 11 states, with the potential for network termination. Elevance controls 68% of Indiana’s commercial insurance market, according to the Indiana Hospital Association.
“Patients are already protected from surprise medical bills under the No Surprises Act, meaning Elevance’s policy was not saving anyone money; it would have only benefitted Elevance at the expense of patients, providers, and access to care,” IHA President Scott Tittle said in a news release.
The policy is still effective in Colorado, Connecticut, Georgia, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio and Wisconsin.
Under the new measure, insurers in Indiana would be banned from implementing administrative fees or penalties on facilities or providers related to care involving out-of-network clinicians. The bill would also establish a framework for addressing disputes tied to the independent dispute resolution process under the No Surprises Act. When 25 or more IDR disputes are filed within a 90-day period, the insurer can trigger a mandatory good faith negotiation involving the out-of-network provider and the facility. The parties must hold at least one meeting, and the resulting memorandum is filed with the Indiana insurance department. The memorandum is informational only and cannot be used to impose penalties, mandate payment outcomes or alter rights under federal or state law.
The IHA, Indiana State Medical Association and Indiana Physicians Health Alliance all backed the bill. The policy had garnered national attention, with hospital groups urging Elevance to rescind the change and warning it could lead to delayed care, increased travel burden for patients and the loss of critical hospital services.
Elevance defended the policy as a response to what it characterized as abuse of the IDR process. In a December letter to the American Hospital Association, Elevance called the move “a measured and appropriate step” and said it does not apply to emergency care, situations with no in-network alternative, or rural, critical access and safety-net facilities.
“We appreciate the bill sponsors for engaging all healthcare stakeholders to address Indiana’s high healthcare costs,” a spokesperson for Elevance told Becker’s. “The final legislation brings needed transparency and reforms to an arbitration process that has been driving up costs. This compromise supports collaboration between providers and health plans to reduce healthcare cost trends for Hoosiers. We look forward to continuing our work with providers, employers, and policymakers to expand access to affordable care statewide.”
Elevance said the disputes driving the policy are predominantly for scheduled, non-emergent procedures billed by private equity-backed physician staffing companies. According to CMS, four groups are initiating the most disputes: HaloMD, Team Health, SCP Health and Radiology Partners.
Providers have been winning roughly 85% of IDR disputes, with median payment determinations reaching 459% of the qualifying payment amount in 2024 when the provider prevailed. The IDR process has generated at least $5 billion in costs between 2022 and 2024, including administrative fees and payment amounts that far exceed market rates. The volume of disputes has also outpaced expectations, with federal regulators originally projecting 17,000 annual disputes. More than 3.3 million disputes were filed from mid-2022 to May 2025.
