Elevance Health is rolling out new billing policies that check where a service was actually delivered before paying for it. The insurer says some providers bill services performed at off-campus facilities at higher, in-hospital rates, and it wants that to stop. The changes roll out across 2026 and 2027 in its commercial, Medicare Advantage and Medicaid businesses, according to Fierce Healthcare.
Here is what it means for you: if a lab test or a routine service happens in a doctor's office or an off-site facility, the claim should be paid at that lower setting's rate, not the hospital's. Catherine Gaffigan, M.D., president of health solutions at Elevance, told Fierce Healthcare that the extra cost is felt by payers as well as patients. The same service, the same quality, the same location — a higher price purely because of how the claim was coded.
This is not just one insurer's housekeeping. It is a visible commercial move in a broader push — by Congress, by regulators and now by payers — to make the price of care depend on the care itself, not the real estate it sits in. And it lands in a billing area most patients never see until the explanation of benefits arrives.
What exactly is Elevance changing?
Under the new policies, providers will be required to identify the physical location where a service was offered. Elevance will then cross-check the billing information against hospital addresses to confirm the data is correct, the company said. The goal is to ensure services provided at off-campus hospital facilities are reimbursed appropriately, and to avert higher billing for certain lab tests performed off-site.
Think of it as an address verification step added to the claim. If the building is not the hospital, the claim should not carry the hospital's rate. That is the mechanism in plain terms, and it is why the insurer frames the program as driving greater transparency into where patients receive care.
Why does this cost patients money?
Because the higher rate does not stay with the hospital's balance sheet. A 2023 analysis from the Blue Cross Blue Shield Association, cited by Fierce Healthcare, estimated that Medicare spent an extra $2.7 billion over three years on four services delivered in a hospital outpatient facility rather than a physician office when that was possible. Patient out-of-pocket costs for those services were $411 million higher, per the study.
That $411 million is the number to hold onto: per the study, patients paid more out of pocket when the same services were billed at the hospital outpatient setting rather than a physician office. Gaffigan put it plainly: "It's driving cost on both sides of the equation for no change in the quality of the care that's being provided or even the location of the care that's being provided."
Readers who want to see this dynamic on their own paperwork can start with how to read an itemized hospital bill — and catch the errors before they become yours, because facility-fee confusion is exactly the kind of line item worth questioning. The broader price effects of hospital market power are covered in our piece on hospital consolidation and prices: what decades of mergers did to your bill. This connects to our earlier piece, How to Read an Itemized Hospital Bill — and Catch the Errors Before They Become Yours. This connects to our earlier piece, How to Read an Itemized Hospital Bill — and Catch the Errors Before They Become Yours.
Why now? Congress and regulators moved first
The timing is not accidental. Congress took action in March as part of the bipartisan spending deal, which will soon require providers to bill services at off-campus sites using unique National Provider Identifier numbers. That change takes effect in 2028. Separately, the Centers for Medicare & Medicaid Services took aim at site-neutral payments in its proposed outpatient care payment rule for 2027 — a shift that has drawn ire from providers.
Gaffigan said scrutiny from both Congress and regulators helped build momentum for Elevance and other insurers to act on their own. Read that as an industry signal: as more insurers take similar steps, the data infrastructure — the verified location, the unique identifiers — becomes available to everyone.
Does this apply to my plan?
The policies will be implemented across 2026 and 2027 in Elevance's commercial, Medicare Advantage and Medicaid businesses, per Fierce Healthcare. That is a wide footprint, but it is Elevance's footprint. If you are covered by a different insurer, this specific policy does not apply to you yet — though the federal NPI requirement will apply broadly from 2028, and CMS's proposed 2027 rule could reach further if finalized. Check your plan documents or ask your insurer's member services which site-of-care rules apply to your coverage.
What should patients watch for?
Three things, all grounded in what the sources document:
- The location on the claim. If you received a lab test at an off-site draw station and the claim shows a hospital outpatient setting, that is the mismatch Elevance's cross-check is designed to catch — and one you can question too.
- The timeline. Elevance's changes phase in over 2026 and 2027, so the same service may be billed differently depending on when it happens.
- The provider response. CMS's site-neutral proposal has drawn ire from providers, and hospitals may contest how these policies are applied. Disputes over individual claims are possible during the transition.
"I think many of us in the industry feel that that's where we should be, that we should not be paying more based on location — it should be based on the care that's being provided," Gaffigan said. Whether that principle holds in practice will depend on how accurately locations are reported and how the provider pushback plays out.
The takeaway
The evidence here establishes one clear development: a major national insurer is verifying care locations before paying hospital-level rates, phased across 2026 and 2027, with federal requirements arriving in 2028 and a proposed CMS rule for 2027. What remains unknown is how much patients will actually save, and whether other insurers adopt matching policies. For now, the practical step is the same one this site keeps returning to: look at the claim, check the setting, and ask questions while the bill is still an explanation of benefits rather than a balance due. Our hospital price transparency rules guide explains what hospitals must publish and how to use it — useful context as site-of-care pricing comes under sharper scrutiny. For related coverage, see Hospital Price Transparency Rules: What Hospitals Must Publish and How to Use It. For related coverage, see Hospital Price Transparency Rules: What Hospitals Must Publish and How to Use It.
This article is general information, not financial advice. Consider your own circumstances or consult a licensed financial professional.
