Elevance Health brings commercial site-neutral payment to hospital claims

Elevance Health is moving site-neutral payment concepts into commercial reimbursement, with a Sept. 29 announcement setting the stage for constraints on hospital payment.

The insurer said it would incorporate a series of new billing policies “intended to address increasingly common situations where care provided at an off-campus location is billed at a higher hospital rate.”

Implementation of the policies will span the remainder of 2026 into 2027. One policy will require hospitals to include the physical location of the service delivery on their claims. Others are set to bring payment down to contracted non-facility rates for unspecified lab tests and off-campus outpatient services.

Elevance Health, the nation’s No. 2 insurer by enrollment, with more than 45 million members as of 2025, said the policy will apply to the company’s commercial, Medicare Advantage and Medicaid managed care health plans.

“It is the first commercial market payer to announce their intent to require hospitals to include physical location on billing forms and adjust rates for off-campus care accordingly,” according to the announcement.

The insurer sought to frame the new policies in the context of transparency and affordability.

“When the same service costs more because a hospital owns a doctor’s office or clinic, workers and families are saddled with higher premiums and cost sharing,” Catherine Gaffigan, MD, president of health solutions at Elevance Health, said in written remarks.

Federal site-neutral policies provide a model

Elevance says the policies track with broader trends, including steps taken by CMS, Congress and states.

During the two Trump administrations, CMS has initiated site-neutral payment in Medicare for clinic visits (2019), drug administration (2026) and imaging (proposed but not yet finalized for 2027). Those services could be among the first subject to the new policy at Elevance and any other insurers that subsequently go the same route.

Under the Consolidated Appropriations Act of 2026, hospitals are required to use separate National Provider Identifiers (NPIs) and submit mandatory attestations for each off-campus hospital outpatient department (HOPD) beginning Jan. 1, 2028. Medicare will not make payments for any services furnished at an affected site unless the requirements are met.

Instead of NPIs, Elevance intends to deploy automated address cross-referencing in adjusting payment rates. The company’s processing system would downgrade claims where applicable by applying Place of Service Code 19 (Off-Campus Outpatient Hospital) to ensure the newly lowered rate takes effect.

In addition to the federal actions, a handful of states have implemented or proposed versions of site-neutral payment, such as by prohibiting facility fees for telehealth or preventive services or expanding required disclosures of the fees.

Commercial payers have other tools to constrain hospital payment

An industry expert on reimbursement said the new Elevance policy fits in the same broad category as a policy announced by Aetna in 2025 to introduce level-of-severity assessments in hospital inpatient payment. Aetna automatically approves short-stay urgent or emergent inpatient admissions but cuts payment rates to a level approximating outpatient observation rates if the stay falls short of meeting proprietary Milliman Care Guidelines on inpatient severity.

Aetna’s policy is the subject of litigation brought in April by Philadelphia-based Jefferson Health.

Via such approaches, payers are “able to legally manipulate [federal] regulations to their financial advantage,” said Ronald Hirsch, MD, vice president of regulations and education with R1 Physician Advisory Solutions at R1 RCM.

Such policies give insurers a way to circumvent the risk of being flagged for a regulatory breach, Hirsch noted.

“Since this is a payment policy which is governed by contract, and not an access-to-care issue, there should be no objections from regulators, even for Medicare Advantage,” he said.

Site-related payment restrictions also can be narrower or more subtle than those introduced by Aetna and Elevance.

“Many plans now either deny or significantly limit reimbursement for HOPD infusions where a lower-cost alternative site of care is deemed clinically appropriate,” according to an April 2026 analysis by the healthcare law firm Frier Levitt. “Others impose prior authorization requirements that effectively steer patients away from hospital settings.”

Out-of-network payment also targeted

The new policy is not the first instance over the past year that an Elevance Health payment initiative was viewed as unfavorable to hospitals. Heading into 2026, the company’s Anthem health plans established a policy that penalizes hospitals up to 10% of the contracted payment if an out-of-network provider furnishes nonemergency care to an enrollee.

The insurer also can terminate hospitals from the network in such circumstances. Exemptions apply to designated rural and safety-net hospitals, and Anthem may approve exceptions on a case-by-case basis.

Along with curbing out-of-network costs, parent company Elevance said an objective of the policy was to counter what the insurer viewed as inappropriate use of the No Surprises Act’s independent dispute resolution process (IDR). With providers filing large numbers of disputes and winning most of them, insurers have expressed concern about provider incentives to keep care out of network and pursue payment through IDR.

In September, a Long Island-based surgery practice filed a lawsuit against Elevance, contesting the policy in New York federal court. That followed a May lawsuit brought by the California Hospital Association.