Indiana Senate Passes ISA-Endorsed Response to Anthem’s 10% Payment Penalty Policy

Yesterday, the Indiana State Senate passed Indiana Society of Anesthesiologists (ISA)-endorsed legislation, Senate Bill 189. The legislation responds to Anthem Blue Cross Blue Shield’s recent policy in several states to impose a 10% reduction in facility payments when hospitals utilize out of network providers. SB 189 classifies this type of penalty as an unfair and deceptive act or practice in the business of insurance.

Although Anthem’s payment reduction targets hospitals, the policy carries significant indirect consequences for anesthesiology practices and other hospital-based physicians whose services are billed separately but remain integral to hospital operations.

The American Society of Anesthesiologists (ASA) has been leading a national campaign seeking the reversal of this abusive Anthem policy.  Efforts have included meeting with the payer and urging stronger Congressional efforts to hold payers such as Anthem accountable for their disruptive policies. By penalizing hospitals for working with out of network clinicians, the policy may create pressure for institutions to require anesthesiology groups to join Anthem’s network—even when proposed contract terms are neither equitable nor economically viable. Independent practices could lose critical negotiating leverage and be forced into accepting reduced payment rates solely to help hospitals avoid Anthem’s 10% penalty.

SB 189 is an important step toward protecting fair contracting practices, safeguarding independent physician groups, and ensuring that patients in Indiana continue to receive uninterrupted access to anesthesia care without insurer-imposed interference.  ASA joins with ISA in urging the enactment of SB 189 in law.