Indiana health care associations are praising a state Senate bill aimed at curbing insurer practices that they say could restrict patient access to care. The Indiana Hospital Association (IHA), Indiana State Medical Association (ISMA) and Indiana Physicians HealthAlliance (IPHA) welcomed the advancement of Senate Bill 189 through the Senate Insurance and Financial Institutions Committee, noting its importance for hospitals and independent physicians statewide.
SB 189, passed by a 6‑1 vote in committee, prohibits insurers from penalizing hospitals or facilities when care involves an out-of-network provider.
The legislation comes as Elevance Health, one of the largest for‑profit managed care organizations in the country, implemented its "Facility Administrative Policy: Use of a Nonparticipating Care Provider" on Jan. 1. Under that policy, hospitals face a 10% reimbursement reduction whenever a patient's care involves an out-of-network clinician, even if the hospital itself is in-network. Elevance says the policy is intended to control costs, encourage in-network care and reduce unexpected financial exposure, but hospital associations contend it can limit patient choice, strain provider relationships and threaten timely access to care.
Elevance Health has defended its policy, describing it as a measured step to maintain plan affordability and network integrity. The company cited instances in which out-of-network providers scheduled non-emergency procedures at in-network hospitals to trigger higher reimbursements through independent dispute resolution, driving up costs. Elevance says the policy still allows exceptions for emergency care and cases with prior approval.
The bill would take effect in July 2026, banning carriers from imposing administrative fees on facilities using out-of-network providers. The state insurance commissioner could penalize insurers up to twice the original amount for violations. It applies to all carriers operating in Indiana and is intended to preserve patient access, protect provider financial stability and prevent insurers from using out-of-network penalties to dictate care or contracts.
SB 189 is advancing through the Indiana Legislature but has not yet been passed by the full Senate. Introduced on Jan. 6 by Sen. Scott Baldwin and co‑authored by Sen. Lonnie Randolph, the bill was referred to the Senate Insurance and Financial Institutions Committee, which issued an "amend do pass" report on Jan. 22, sending it forward for consideration by the full Senate. If it passes the Senate, it will then move to the House for review.
Health care leaders say SB 189 could serve as a model for other states considering similar protections, as Elevance Health's out-of-network policy affects hospitals and providers across multiple states.
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