Effective January 1, 2026, Anthem (also known as Elevance Health) implemented its Facility Administrative Policy: Use of a Nonparticipating Care Provider for the states of Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio, and Wisconsin, with plans to expand the policy to California on June 1, 2026. The policy requires facilities contracted with Anthem to ensure that all inpatient and outpatient services delivered to Anthem’s commercial plan members in the facility setting – including those provided by hospital-based physician groups and parties unrelated to the provider – are only performed by participating (in-network) providers. Violation of the policy results in a 10% penalty on the in-network facility provider or termination from Anthem’s network.
Under the policy, when out-of-network providers are involved in patient care for a claim, Anthem will reduce payments to the facility by 10% of the allowed amount. Facilities may not balance bill Anthem members for the difference. Continued use of out-of-network providers at the facilities may result in termination from Anthem’s network. The policy includes exceptions for (a) emergencies, (b) pre-approved out-of-network provider services, (c) instances when no participating provider is available to render the services within the same geographic area, and (d) for rural hospitals (as defined by HRSA), critical access hospitals, and safety-net hospitals.
This policy is widely viewed by the medical community as an attempt by Anthem to pass on the costs imposed by the requirements of the No Surprises Act (NSA), which requires commercial payors to pay out-of-network providers reasonable rates when they deliver services to members at in-network facilities. The NSA also requires payors to resolve payment disputes with such out-of-network providers in an independent dispute resolution process. The NSA prohibits balance billing by the out-of-network providers and establishes clear rules for out-of-network clinician services in facility settings.
Anthem’s policy shifts its responsibilities under the NSA to hospitals and other facility-based providers, effectively shirking its responsibility to negotiate and contract with clinicians in good faith and with fair terms to ensure adequate in-network access to care for its members. The effects of this policy may include:
- Penalizing the facility for individual provider contracting decisions that are outside of the facility’s control. Many hospital-based clinicians (including anesthesiology, radiology, emergency medicine, pathology, and others) are independent groups whose participation choices are not directed by the facility.
- Reducing Anthem’s incentive to offer acceptable participation terms and rates to clinicians.
- Generating profit for Anthem when the 10% penalty on the facility claim actually exceeds the out-of-network professional claim that Anthem is responsible for paying.
- Incentivizing and potentially forcing the facility to terminate clinician privileges if the clinician rejects participation, harming patient access to care by effectively disallowing services providers to treat them or, conversely, effectively making the facility out-of-network for Anthem’s members if it has to rely on out-of-network clinicians and cannot absorb the penalty.
- Creating operational burdens at the facility relating to verifying network status of every service provider (a virtual impossibility due to Anthem’s inability to maintain accurate and up-to-date provider directories).
- Imposing barriers on facilities for seeking an exception for services by out-of-network provider (for which there are no published criteria for approval), effectively delaying or preventing time-sensitive care to Anthem members.
Numerous organizations, including the American Hospital Association and a collection of medical community organizations, have publicly urged Anthem to rethink and withdraw the policy, pointing out that this policy will harm hospitals and Anthem’s members. They further note that Anthem’s approach was actually rejected in the consideration and finalization of the NSA. So far, Anthem has rejected such requests.
In March, Indiana (Anthem’s home state) enacted legislation forbidding payors from penalizing hospitals for using out-of-network providers, characterizing acts like Anthem’s policy approach as “an unfair and deceptive act or practice in the business of insurance.” Providers and organizations may want to consider petitioning their own state legislatures to follow Indiana’s example, in addition to pursuing other remedies in court.
