Indiana First in Nation to Block Insurer Penalties That Threaten Patient Access to Care

Indiana has become the first state in the nation to pass bipartisan legislation protecting patient access to timely, medically necessary care by  prohibiting insurance companies from imposing financial penalties on hospitals and facilities when a patient’s care involves an out-of-network provider.

Authored by Indiana Sen. Scott Baldwin, Senate Enrolled Act (SEA) 189 was approved by both chambers of the Indiana General Assembly and now heads to Gov. Mike Braun for signature.

The measure comes as Elevance implemented its “Facility Administrative Policy: Use of a Nonparticipating Care Provider” in Indiana on Jan. 1, 2026. Under the policy, hospitals and other outpatient facilities faced a 10% reimbursement cut if any out-of-network clinician participated in care. Without similar legislative action, 10 other states - Colorado, Connecticut, Georgia, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio and Wisconsin - remain subject to the policy.

Advocates say the legislation is a critical step toward protecting patient access to high-quality care and curbing unfair insurer practices within Indiana’s health care system where Elevance, including its Anthem Blue Cross Blue Shield plan, controls 68% of Indiana’s commercial insurance market.

Health care leaders warned the policy could have led to unintended consequences, including delayed care, increased travel burdens for patients, and the loss of critical services hospitals can provide.

“We thank members of the Indiana General Assembly and Sen. Baldwin in particular for putting Hoosier patients first,” said Scott B. Tittle, president of the Indiana Hospital Association. “Patients are already protected from surprise medical bills under the No Surprises Act, meaning Elevance’s policy was not saving anyone money; it would have only benefitted Elevance at the expense of patients, providers, and access to care.”

The impact would have been especially significant for independent physicians, who often lack the resources to absorb such financial pressures, advocates said.

“Doctors already navigate complex networks and heavy administrative burdens,” said Ryan Singerman, DO, a family physician and president of the Indiana State Medical Association. “This policy would have added even more pressure, forcing physicians into unfavorable contracts that may not sustain their practices.”

“We greatly appreciate state lawmakers for recognizing the role of independent providers in maintaining high-quality, lower-cost health care in Indiana,” said Steve Freeland, board officer of the Indiana Physicians Health Alliance and CEO of Cancer Care Group in Indianapolis. “There are circumstances when the best medical option for the patient is an out-of-network independent physician, and SB 189 ensures patients can continue to receive the care they need.”

“We are grateful to Senator Baldwin and our other state legislators for passing this common-sense measure,” said J. Andy Day, MD, president of Indiana Society of Anesthesiologists. “In anesthesia, like with other hospital-based specialties, being out of network is often a result of providers being offered unfair contracts by insurance companies. Anthem’s policy would have used hospitals and patients as a leverage tool to force physicians into bad contracts. This bill will prevent that, ensuring that Indiana residents will have access to the top physicians and the best care possible.”