Three major medical organizations are urging Anthem to withdraw a policy that would penalize hospitals and outpatient facilities that use out-of-network providers.
The American Society of Anesthesiologists, American College of Emergency Physicians and American College of Radiology sent a joint letter to the insurer calling for it to rescind the policy, calling it "deeply flawed and operationally unworkable."
The three organizations said that policy would force hospitals to pressure independent providers to join Anthem's network "under unfavorable terms" and potentially shuffling providers to manage the policy could hinder continuity of care for patients.
"It effectively shifts Anthem’s network adequacy obligations onto facilities, holding them financially liable for the contracting status of independent physician groups—an area over which they have no control or infrastructure to manage," the groups wrote.
Anthem said that the policy is in response to provider behavior around the No Surprises Act, a law that bans surprise medical billing. Disputes for out-of-network care are intended, under the law, to be resolved using a qualifying payment amount based on in-network rates.
However, if the dispute cannot be resolved in this manner, it proceeds to baseball-style arbitration, and the number of cases that have proceeded to that point has far outpaced expectations. Insurers have expressed concern about providers flooding dispute resolution to secure higher payouts.
The three medical organizations said Anthem is aiming to avert NSA through its policy, even though the law "already provides a fair and balanced mechanism" to resolve out-of-network claims.
PUBLISHED: Oct. 31 at 6:55 a.m.
Elevance Health's Anthem plans are cracking down on hospitals or outpatient facilities that offer services using out-of-network providers.
Beginning Jan. 1 in 11 states, Anthem will impose an administrative penalty equal to 10% of the allowed amount on a facility's claims that include out-of-network providers. These facilities will also be at risk of termination from Anthem's provider network, per a notice from the insurer sent out earlier this month.
Ariel Bayewitz, vice president of health economics at Elevance Health, told Fierce Healthcare in an interview that the policy was designed in response to provider behavior under the No Surprises Act (NSA) independent dispute resolution (IDR) process. He said the insurer has seen a consistent pattern of IDR being used as a "back-door payment channel" for pricey, nonemergent procedures.
The NSA is designed to avert balance bills for out-of-network care that can catch patients by surprise. But Bayewitz said Elevance is instead seeing a trend of planned procedures from out-of-network providers at in-network hospitals pushed toward IDR.
"These cases, by and large, are not surprise bills," he said. "They are planned surgeries, they are nonemergent. They're things like spinal surgeries, plastic surgeries in markets where we have very robust networks."
In the notice (PDF), Anthem said it is "committed to ensuring appropriate use of nonparticipating care providers in the facility-based setting in the care of our members." It specifically calls out care provided in either an inpatient or outpatient setting.
There are exclusions to the policy, including emergency care and instances in which Anthem has already approved the use of an out-of-network provider at a certain facility, per the notice. Anthem also warned providers that they cannot balance bill patients for the penalty should they incur one from the insurer.
The American Hospital Association told Fierce Healthcare that it is reviewing the policy and expressed concern.
While data show that NSA protections have averted millions of surprise medical bills for patients over time, studies have raised questions about the IDR process. Data from the Centers for Medicare & Medicaid Services found that, in early 2024, the number of claims resolved through IDR far outpaced federal estimates.
The NSA was designed with the expectation that most disputes over claims would be resolved before arbitration, using a qualifying payment amount based on the median in-network rates. Providers have argued that they need deeper insight into how insurers are calculating their QPAs and greater oversight into delayed reimbursements for settled claims. They've also argued in court, often successfully, for changes to the IDR process related to administrative filing fee increases and instructions for how heavily arbitrators should weigh QPAs in their decisions.
Bayewitz said providers largely initiate independent dispute cases under the NSA, and they generally tend to win when cases progress to IDR. And the payouts can be significant, he said.
"When you look at what they're getting paid, it's significantly higher than market rates, and in some cases even higher than their own bill charges," Bayewitz said.
A study released in August from researchers at Harvard University and Mass General Brigham found that providers won 85% of disputes initiated since the third quarter of 2024, and, when they win, the median payment was three times the QPA. When insurers win, generally reimbursements are aligned more closely to the QPA, per the study.
For example, Bayewitz said breast reduction surgery is a high-impact code for these disputes. In Connecticut, one of the markets where Anthem is implementing its new policy, the average physician award from IDR for breast reduction surgery is $60,000.
The Medicare program, by comparison, pays about $1,145 for that same code in Connecticut, Bayewitz said.
He said the policy ultimately aims to bring hospitals to the table and work to identify the nonparticipating providers who may be engaging in this kind of behavior around the dispute resolution process.
"Our goal is fairly straightforward, and it's about protecting affordability for members and employers," Bayewitz said.
He added that employers bear the brunt of the costs for claims resolved through IDR today, with close to 90% of those costs paid by self-funded employers.
James Gelfand, CEO of the ERISA Industry Committee, which represents some of the country's largest employers, told Fierce Healthcare that NSA resolutions that end up in high payouts will inevitably translate to higher premiums and cost-sharing for employees down the line.
This is especially true as employers look to weather significant healthcare cost increases overall, with respondents to a recent survey from the Business Group on Health estimating median cost increases of 9% for 2026.
Gelfand said that, given that regulators and policymakers may not have a chance in the immediate future to take another look at IDR and institute potential reforms, private-sector stakeholders can step up and try to find a remedy, as Anthem is aiming to with its new policy.
"We appreciate that there are some private sector solutions, finally, that are being innovated," he said. "Let's get some more."