March 03, 2026
What You Need to Know: Anthem Blue Cross will begin enforcing a new administrative policy in California on June 1, 2026, penalizing hospitals when out-of-network physicians provide care to patients enrolled in certain plans. Physician organizations warn the policy could pressure doctors into unfavorable contracts, accelerate consolidation and disrupt patient access to care.
Anthem Blue Cross will soon implement a controversial policy in California that penalizes hospitals when out-of-network physicians are involved in patient care.
Effective June 1, 2026, Anthem will implement its Commercial Facility Administrative Policy: Use of a Nonparticipating Care Provider for members enrolled in self-funded plans, including administrative services only (ASO) plans. Self-funded plans are employer-sponsored arrangements in which Anthem administers benefits but does not assume financial risk.
Under the policy, participating hospitals and facilities must ensure that physicians providing services in inpatient or outpatient, facility-based settings are in Anthem’s network — or face penalties.
Specifically, Anthem will impose an administrative penalty to reduce payment by 10% of the allowed amount on facility claims involving nonparticipating physicians or other providers. The insurer has also indicated that continued use of out-of-network physicians could result in termination from its network.
The California Medical Association (CMA) previously joined a national federation letter urging Anthem’s parent company, Elevance Health, to rescind the policy when it was first announced for implementation in other states. At the time, the policy did not apply in California. Its expansion now raises renewed concerns for physicians and hospitals statewide.
Why Physician Organizations Are Concerned
Physician organizations across the country have warned that the policy undermines the bipartisan No Surprises Act (NSA), which protects patients from unexpected medical bills while preserving a federal process for resolving payment disputes between physicians and health plans.
In the federation’s letter to Elevance Health President and CEO Gail Boudreaux, signatories wrote that “Anthem is attempting to bypass the negotiated bipartisan policy under the NSA,” noting that federal law already establishes an independent dispute resolution process for out-of-network claims.
Instead of relying on that federal framework, Anthem’s policy shifts financial pressure onto hospitals. Hospitals, in turn, may pass those penalties on to physicians or use them as leverage to compel physicians to join Anthem’s network — potentially under unfavorable contract terms.
Physician organizations warn that this dynamic could accelerate consolidation, threaten the viability of independent practices and create new access challenges in specialties where network participation is limited.
Limited Exceptions
Anthem’s policy includes limited exceptions for:
Emergency services
Cases where Anthem grants prior approval for use of a nonparticipating care provider
Situations where no participating provider is available within the same geographic area
Rural hospitals
Critical access hospitals
Certain safety-net hospitals
Importantly, hospitals may not balance bill patients for any administrative penalties assessed under the policy.
CMA will continue to monitor Anthem’s implementation of this policy and advocate for contracting practices that protect independent physician practices and preserve patient access to care.