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Lawmakers hear competing views as bill targets insurer penalties tied to out‑of‑network providers
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Summary
Senators heard lengthy testimony for and against SB 189, which would bar insurers from imposing a 10% administrative penalty on hospitals when out‑of‑network providers deliver care. Physician groups and hospitals warned of access and competition harms; Elevance/Anthem representatives said the policy aims to curb IDR‑driven inflation. A committee amendment reclassifying the penalty as a deceptive insurance practice passed and the bill was held for further work.
The Senate Insurance and Financial Institutions Committee spent the bulk of a hearing debating Senate Bill 189, a measure prompted by a large payer's notice that it would reduce hospital reimbursements by 10% when hospitals use providers who are out of the insurer's network.
Independent physician advocates and hospital representatives said the policy coerces physicians into insurer networks, threatens independent practices — particularly in rural areas — and could reduce access. "This policy undermines protections, threatens independent practices, and restricts access to care, particularly in rural Indiana," said Dr. Kelly Park, an anesthesiologist testifying for the Indiana Society of Anesthesiologists.
Brian Burdick of the Indiana Hospital Association described how the federal No Surprises Act and its independent dispute resolution (IDR) mechanism intersect with the dispute. "Anthem has been losing, as I understand, 85% to 90% of the time at the federal government," Burdick said, arguing that default IDR outcomes favor providers and that the insurer policy uses hospitals as leverage to influence physician contracting.
Representing Elevance Health, Dr. Katherine Gaffigan said the insurer's October policy and the January implementation were intended to address what the company views as an IDR process that is being exploited and is driving inflation in awards. "We are showing up 100% of the time" to IDR now, Gaffigan said, while also acknowledging IDR awards have favored providers nationally; she told senators the company has taken operational steps to respond to high volumes of disputes.
Committee members focused questions on whether the insurer policy circumvents federal law, how QPA (qualified payment amount) and the IDR process operate, and whether the policy would shift costs to patients. For example, Senator Gaskell asked whether the penalty would raise costs for patients; witnesses argued it could flow through hospitals to patients and employers in different ways.
The committee considered an amendment that removes an automatic penalty and instead classifies the insurer action as a deceptive insurance practice enforceable by the Department of Insurance. The amendment passed on a roll call (Aye 8, No 1). The chair then said he would hold the bill for further work and scheduled another consideration next week.
Next steps: the bill will be revised per the amendment language and the committee will reconvene to consider the revised measure and any negotiated changes.
