Elevance Health is rolling out new billing policies that aim to ensure services are paid for at the appropriate level and drive greater transparency into where patients receive care.
The insurer said there is trend that's growing more common in which services provided at an off-campus facility are still billed at higher, in-hospital rates. Under Elevance's new policies, providers will be required to identify the physical location where a service was offered, and billing information will be cross-checked with hospital addresses to confirm the correct data.
This will ensure that certain services provided at off-campus hospital facilities are reimbursed appropriately, and avert higher billing for certain lab tests performed off-site, the company said.
Catherine Gaffigan, M.D., president of health solutions at Elevance Health, told Fierce Healthcare that there's significant opportunity in addressing this issue, as the additional cost is felt by payers as well as patients.
"It's driving cost on both sides of the equation for no change in the quality of the care that's being provided or even the location of the care that's being provided," Gaffigan said.
Insurers have been discussing this issue for some time. A 2023 analysis (PDF) from the Blue Cross Blue Shield Association estimated that Medicare spent an extra $2.7 billion over the course of three years for four services provided in a hospital outpatient facility rather than a physician office when possible.
Patient out-of-pocket costs were $411 million higher, per the study.
The door was opened to change when Congress took action in March as part of the bipartisan spending deal that will soon require providers to bill services provided at off-campus sites using unique National Provider Identifier numbers. That change will take effect in 2028.
Elevance's policy changes, meanwhile, will be implemented across 2026 and 2027 in its commercial, Medicare Advantage and Medicaid businesses.
In addition, the Centers for Medicare & Medicaid Services took aim at site-neutral payments in its proposed outpatient care payment rule for 2027, a shift that has drawn ire from providers.
Gaffigan said that having these challenges under scrutiny by both Congress and regulators helped build momentum for Elevance and other insurers to take steps of their own.
"I think many of us in the industry feel that that's where we should be, that we should not be paying more based on location, it should be based on the care that's being provided," she said. "It's, frankly, a great partnership with respect to addressing some of these longstanding opportunities."