Indiana Just Blocked Elevance’s Hospital Penalty. 10 States Still Haven’t
Indiana just became the first state in the country to ban insurers from penalizing hospitals for using out-of-network providers. The penalty is still active in 10 other states. If you practice in one of them, you have options and we can help you act on them before critical arbitration deadlines expire.
On February 26, Indiana lawmakers gave final approval to Senate Bill 189, which bans health insurers from imposing administrative fees or penalties on hospitals or providers when care involves an out-of-network clinician. The bill states that imposing these penalties is considered an unfair and deceptive practice in the insurance industry.
This happened in Elevance’s home state. Anthem Blue Cross Blue Shield covers roughly two-thirds of Indiana’s commercial insurance market according to the Indiana Hospital Association, and it was Indiana lawmakers who moved first to shut the policy down.
The bill had broad support. The Indiana Hospital Association, Indiana State Medical Association, and Indiana Physicians Health Alliance all backed it. Senator Scott Baldwin, who authored the legislation, framed the penalty as a deceptive insurance practice, and the final bill codifies that. Under SB 189, any insurer that imposes administrative fees or penalties on a hospital or provider related to out-of-network care is committing an unfair and deceptive act under Indiana insurance law.
Beyond the Penalty Ban
The penalty ban got the attention, but SB 189 also addresses something we’ve been watching closely. There’s been growing tension between high No Surprises Act IDR volume and hospital operations, and the bill tries to address it.
The bill creates a negotiation trigger. When an insurer sees 25 or more arbitration disputes filed against it within a 90-day window, it can initiate a mandatory good faith meeting between itself, the out-of-network provider, and the facility. Everyone has to show up. The outcome gets documented and filed with the Indiana Department of Insurance.
This memorandum has no binding authority. It can’t be used to set payment rates, impose penalties, or override any party’s rights under federal or state law. Elevance wanted hospitals to police their own medical staffs. What they got instead is a conversation requirement. Providers don’t lose any leverage by participating, and their ability to pursue federal IDR remains fully intact.
What Elevance Is Saying vs. What Actually Happened
Elevance spent months defending its penalty nationally and told the American Hospital Association in December that the 10% facility cut was a measured and appropriate step.
Indiana’s legislature still classified the policy as an unfair insurance practice. The negotiation framework is a concession to Elevance’s concerns about IDR volume, but it gives the company nothing it can use to reduce out-of-network reimbursement or restrict provider access.
Elevance still hasn’t explained why providers win 85% of No Surprises Act IDR disputes. Independent arbitrators are awarding payment determinations 3-4 times higher than initial offers. If that’s what neutral arbitrators consistently find when they review the evidence, the IDR system isn’t being abused. Elevance is underpaying providers, and independent arbitrators keep saying so.
Where the Penalty Still Stands
The penalty remains active in 10 states, including Colorado, Connecticut, Georgia, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio, and Wisconsin.
No other state legislature has passed similar protections yet. 14 members of Congress called for a federal investigation in December, but that request is still pending with no public response from federal regulators. And Elevance has given no indication it plans to pull the policy voluntarily in any of the remaining markets.
For out-of-network providers in those 10 states, the penalty is still influencing hospital decisions, but Indiana’s response shows that these policies don’t go unchallenged.
Indiana proved that a state legislature can move fast on this. The bill went from introduction to final passage in about five weeks. Whether the other 10 states follow depends on provider organizations and medical associations in those markets making it a priority.
The Bigger Picture on IDR
The volume of federal arbitration disputes has far exceeded what anyone expected when the No Surprises Act launched. More than 3.3 million disputes were filed in the first three years. Federal agencies originally projected 17,000 to 22,000 per year. That volume didn’t come from abuse. It came from years of systematic underpayment that providers finally had a mechanism to challenge.
Elevance’s penalty was an attempt to shut that mechanism down through economic pressure on hospitals rather than by offering fair reimbursement. Indiana decided that approach crosses the line into unfair insurance practices.
What You Should Do Now
If you practice in Indiana, the penalty no longer applies. Your hospital relationships with out-of-network providers should stabilize now that the bill has passed.
If you’re in one of the other 10 states, you need to act. Hospitals are still under financial pressure from this policy, and that pressure affects you directly. Review your Anthem claims. If arbitration deadlines haven’t expired, file now. Don’t wait for legislative relief that may or may not come. If a hospital is pushing you toward a network contract, we can help you understand what your claims are actually worth before you sign. For background on how the federal arbitration process works and why it favors providers, see our No Surprises Act Explained article.
Talk to Us
Minevich Law Group represents out-of-network providers in No Surprises Act arbitration nationwide, including all 10 states where Elevance’s penalty remains active. We handle federal IDR cases across all 50 states and state surprise billing arbitration in New York and New Jersey.
If Elevance’s policy is affecting your practice, or you have unpaid claims that are still eligible for arbitration, contact us for a free consultation or call 516-202-2196.
