Elevance Requires Hospitals to Specify Care Location
Elevance Health is implementing new billing policies that require hospitals to specify the physical location where care is provided. The policies will roll out this year and next, applying across Elevance Health’s commercial, Medicare Advantage, and Medicaid businesses. The company states the changes align with a growing federal and state focus on how outpatient care is billed and paid.
The policies aim to control higher billing costs associated with off-campus care. Elevance notes that services provided at off-campus locations are often billed at higher hospital rates. Under the new rules, hospitals must identify the physical location of care and verify billing information against hospital addresses. Services will be reimbursed based on the actual location, ensuring certain off-campus hospital care receives the lower off-campus rate.
Elevance is also extending these requirements to lab tests performed outside hospital facilities, preventing inflated billing. The company emphasizes that the changes ensure healthcare services are paid at the appropriate rate, particularly when hospital-owned clinics or doctor’s offices bill at hospital prices. Dr. Catherine Gaffigan, president of Health Solutions at Elevance Health, stated that patients and employers should trust that healthcare bills accurately reflect where care was delivered.
Broader Trends in Healthcare Reimbursement
Hospital outpatient departments typically charge more than doctors’ offices for identical services, creating significant cost impacts, according to the report. The Blue Cross Blue Shield Association found Medicare paid an additional $2.7 billion and patients incurred $411 million more in out-of-pocket costs over three years when services were delivered in hospital outpatient settings instead of physician offices.
States like Indiana and Maine have strengthened billing requirements to ensure accurate payments for off-campus care. The federal government is also pushing for greater transparency, with new requirements for off-campus hospitals scheduled to take effect in 2028. Under the 2026 Consolidated Appropriations Act, hospitals must submit attestations confirming compliance with Medicare’s provider-based regulations for all off-campus hospital outpatient departments and obtain distinct National Provider Identifiers for each location. Hospitals failing to meet these requirements by January 1, 2028, will lose Medicare reimbursement eligibility under the Outpatient Prospective Payment System.
Elevance notified providers earlier this year that certain services at off-campus hospital locations would be reimbursed at the applicable off-campus rate. Gaffigan highlighted that when the same service costs more due to hospital ownership of a doctor’s office or clinic, workers and families face higher premiums and cost-sharing. She advocated for this approach to become standard practice and urged Congress to take further steps for billing transparency and site-neutral payments.
