Elevance Health is taking aim at one of health systems’ most profitable billing practices. The insurer plans to require hospitals to list where care was physically delivered on claims, and it will pay off-campus services at off-campus rates rather than hospital outpatient rates.
The insurer announced Sept. 29 that the policies will apply across its commercial, Medicare Advantage and Medicaid plans and roll out through 2027. Elevance said it is the first commercial payer to publicly require physical location data on claims and tie reimbursement to it.
Under the policies, Elevance will:
- Require hospitals to list where care was physically provided on billing forms
- Check billing data against hospital addresses to confirm the care site
- Pay certain off-campus hospital services at off-campus rates
- Block hospital-rate billing for lab tests done at other locations
“Patients and employers should be able to trust that health care bills accurately reflect where care was provided,” Catherine Gaffigan, MD, president of health solutions at Elevance, said in the release.
Elevance cited Blue Cross Blue Shield Association figures showing Medicare paid an additional $2.7 billion, and patients paid $411 million more out of pocket, over three years when certain services were delivered in hospital outpatient settings rather than physician offices. In a separate case the company cited, one patient’s bill rose more than tenfold after their physician’s office moved to a hospital-owned facility.
The policy lands as federal site-neutral pressure builds. A federal law enacted in February requires hospitals to meet new identification and reporting requirements for off-campus outpatient departments by 2028 or risk losing Medicare reimbursement. CMS’ 2027 outpatient proposed rule would expand site-neutral payment policies and cut payments for 340B drugs, affecting about 3,500 hospitals and 6,400 ASCs. A final rule is expected around Nov. 1.
Hospitals receive about 60% more from Medicare than physician offices for comparable services because of how facility and professional fees are calculated. ASC leaders have said narrowing that gap could speed the shift of cases from hospital outpatient departments to surgery centers.
“Care tends to move toward the most patient-friendly and cost-effective setting,” Peter Bravos, MD, told Becker’s in March.
Others warn that site-neutral policy has lowered payments rather than evened them out.
This is not Elevance’s first site-of-care policy to draw provider attention. In January, the insurer began charging facilities in 11 states an administrative penalty equal to 10% of the allowed amount on facility claims involving nonparticipating providers. Physician groups criticized the policy, and 14 House lawmakers called for a federal investigation.
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