The California Hospital Association has filed suit against Anthem, challenging a policy that aims to curb out-of-network care.
The insurer unveiled the policy in late 2025 and it took effect in January. It imposes a penalty on hospitals for claims that include out-of-network providers, and puts them at risk from being terminated from the network entirely.
The company said the policy was designed in response to provider behavior under the No Surprises Act, which has seen large quantities of claims disputes making it to arbitration rather than being resolved in negotiations. While the legislation is designed to avert surprise medical bills for patients, payers argue that it can be used to juice reimbursement for nonemergent services.
Hospitals hit back that the policy could force providers to join Anthem's network under unfavorable terms.
In the lawsuit, CHA argues that state law prevents hospitals from requiring that doctors or medical groups participate in a particular insurance network. This means facilities aiming to comply with Anthem's policy brush up against statute.
In addition, the organization says that it is the insurer's responsibility, and not that of hospitals, to ensure providers are in-network.
“Anthem’s new policy is trying to force hospitals to solve a problem Anthem created,” said CHA President and CEO Carmela Coyle in an announcement. “It’s illegal, ignores the agreements Anthem has with its enrollees, and will lead to further financial stress for California hospitals and the communities they care for during an extremely unstable period in health care.”
Daron Tooch, legal counsel for CHA, said in the announcement that the organization is "confident the courts will recognize Anthem’s move as a flagrant attempt to increase their profits at a time when millions of Californians are projected to lose their health care coverage."
A spokesperson for Elevance Health, the parent company of Anthem, reiterated in a statement to Fierce Healthcare that the insurer is focused on rooting on potential abuse of the NSA's independent dispute resolution process.
"These cases aren’t surprise situations, they’re planned surgeries, such as plastic surgery, in markets where we already have robust in-network options," the spokesperson said. "Unfortunately, some out-of-network providers undermine the protections and goals of the No Surprises Act and charge working families and their employers tens of thousands of dollars more than what Medicare and in-network providers are paid for the same in-hospital medical care."
"That out-of-network billing is not fair, and our policy creates an incentive for hospitals to stop it," they said.