Medical groups tell Elevance to drop penalty on out-of-network physicians

Three leading medical groups have spoken out against an Elevance plan to impose a 10% payment penalty on facility claims involving out-of-network (OON) clinicians, saying the policy raises legal and ethical questions. 

In a letter to Elevance President and CEO Gail Boudreaux, the American Society of Anesthesiologists (ASA), American College of Emergency Physicians (ACEP) and American College of Radiology (ACR) said the policy shifts network adequacy responsibility to hospitals and other facilities, and jeopardizes continuity of care and patient access to essential services.

Under Elevance’s policy, if a facility uses a nonparticipating provider in a claim, the insurer may apply an administrative penalty equal to 10% of the allowed amount of the facility’s claim that involves an out‐of-network provider.

Elevance said the goal is to encourage and prioritize in-network care when a member is at an in-network facility, to reduce administrative complexity, improve affordability and limit unexpected out-of‐network provider costs for members. 

The medical groups urged the insurer to immediately abandon the policy, which is set to take effect in January 2026, saying it threatens to remove sites from the network for continued use of out-of-network clinicians.

Anthem became Elevance in a rebrand in 2022.

WHAT’S THE IMPACT 

The organizations called the policy “unworkable.”

“It effectively shifts Elevance’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,” they wrote. “Hospitals will be forced to compel independent providers to join Anthem’s network under unfavorable terms, leading to a risk of worsening financial instability and loss of clinicians.”

According to the letter, the need to reorganize or replace physician groups will jeopardize hospitals’ continuity of care and patient access to essential services.

“Provider staff privileged decisions are based on quality, competence, and credentials – not insurance participation,” the groups wrote. “Expecting facilities to monitor and enforce payer contracts across dozens of independent entities and multiple commercial plans is not only impractical but raises serious legal and ethical concerns.”

The organizations called the policy an attempt to subvert the federal No Surprises Act, saying the latter already provides a fair mechanism to resolve facility-insurer OON care payment issues – one that leaves patients out of the process.

“Network adequacy is the responsibility of insurers, not hospitals, and is a fundamental element in incentivizing good-faith negotiations between physicians and insurers,” the groups said.

THE LARGER TREND 

ASA, ACEP and ACR are urging Elevance to immediately reconsider the policy.

Instead, they call for a more “sustainable and collaborative” approach to network adequacy and clinician contracting.

The groups say they favor an approach that respects the clinical autonomy of medical professionals and ensures uninterrupted access to high-quality care for patients.