This is a guest blog written by Lauren Stewart, senior director of government affairs at Americans for Prosperity.
Here’s some good news for Americans tired of paying too much for health care: A major insurer isn’t waiting another year to implement a commonsense reform that could help lower health care costs for all patients. It is acting now!
Elevance Health is beginning to roll out new billing policies across its commercial, Medicare Advantage, and Medicaid businesses aimed at making sure hospitals are paid based on “where patients actually receive care.”
This will directly lead to lower health care costs for patients. We hope other insurers follow suit.
The move takes aim at a practice used by many federal health care programs that pays more for services performed at hospital-owned facilities than independent ones. At Americans for Prosperity, we call this “dishonest hospital billing,” and we’ve been fighting against it for years!
Here’s how it works. Suppose you are a patient at a doctor’s office owned by an independent physician. Now imagine a hospital system buys the practice. The doctors may stay the same. The building may stay the same. The care may stay the same.
But the price can go up — for the patient and for taxpayers.
Hospital-owned outpatient facilities can charge substantially more than independent practices for common services. Research from the Committee for a Responsible Federal Budget found that an echocardiogram performed in a hospital outpatient department can cost three times as much as the same service in a physician’s office. The same goes for other services as well. It’s a giant rip off.
Patients ultimately pay through higher bills, higher cost sharing, and higher insurance premiums.
The incentives can also fuel hospital consolidation. If buying an independent physician practice allows a hospital system to collect more money for the same service, hospitals have a powerful reason to keep acquiring practices. As independent competitors disappear, patients have fewer choices, and prices go up.
Americans for Prosperity has spent years advocating for reforms to address this problem, including greater site-of-service transparency and site-neutral payments. Congress was listening and earlier this year passed the Consolidated Appropriations Act of 2026. This new law requires affected off-campus hospital departments to obtain their own National Provider Identifier numbers and use them when billing Medicare. That will make it much easier to identify where patients actually receive care.
However, the requirement doesn’t take effect until 2028.
To its credit, Elevance isn’t waiting. The company is rolling out policies requiring hospitals to identify the physical location where care occurred, auditing claims against facility addresses, adjusting payments when services were provided off campus, and blocking certain “pass-through” billing for lab tests performed elsewhere.
The policies will roll out during 2026 and 2027 — ahead of the federal requirement.
That tells us something important about both the reform and America’s health care system — good policy can also be good business.
Unlike a government-run health care system where every change depends on a new rule from Washington, America’s competitive health care market gives private companies room to innovate. Elevance sees an opportunity to improve billing accuracy and control costs for its customers, so it can act now.
And that’s exactly what it’s doing.
This is how we make health care more affordable: eliminate government policies that reward higher prices, make costs more transparent, and create incentives for insurers and providers to compete for patients by delivering better value.
Congress got the policy right.
The fact that the market is starting early, before the law takes effect, may be the best evidence yet.
