Elevance’s CEO Tries Using Faulty Government Estimates to Excuse its Failure to Pay Bills

In January, top executives from the nation's major health insurance companies testified before the House Ways and Means Committee. During the hearing, Gail Boudreaux, CEO of Elevance Health, was asked about her company’s compliance with the No Surprises Act—the landmark legislation that protects patients from surprise bills that became the law of the land at the end of 2020. The NSA took patients entirely out of billing disputes between their care providers and their health insurance companies. 

The law also established an arbitration system for handling those disputes. It was on this issue that Congresswoman Erin Houchin (IN-09) pressed Boudreaux, specifically asking whether her company was paying arbitration awards within the legally mandated 30-day window after arbitration ends. It’s a critical question, since providers need timely, fair reimbursement to continue caring for all of us and keep the doors open, especially in rural and underserved communities.

Instead of providing an answer, Boudreaux gave a dissembling non sequitur and complained about the volume of arbitration. 

Here’s exactly what she said: 

“So, Congresswoman, thank you for the opportunity to talk about the No Surprises Act. We are very supportive of the no surprises act. Always have been. There is a problem, though, in the arbitration system where private equity and VC backed entities are flooding the system. The CBO recommended that 17,000 roughly would be this year. We've received across the system almost 2.2 million arbitrations. And because of the style of arbitration where it's basically baseball style, we are seeing awards at 429 to 450%.”

Beyond the fact that she didn't answer the question, nor could she even reference the right federal agency, there are several problems with the faulty information she presents in her non sequitur. 

First and foremost, the estimate of 17,333 potential arbitration cases per year was made in October 2021 by OPM and the Departments of Treasury, Labor, and Health and Human Services and based on the incorrect assumption that the federal program would look exactly like New York's state program. Meaning the agencies’ estimate assumed the number of arbitration initiations for all 50 states would match New York—a deeply flawed premise. Further, New York already had meaningful regulatory protections that kept the volume of these disputes low. At the time the estimates were made, regulators and analysts could have looked to another state, Texas, as a more accurate way to forecast national data. 

The experience of Texas, as noted in Health Affairs, dramatically exceeds the number of disputes in New York:

”The Texas law has an arbitration process for settling disputes but does not include an anchor for certain out-of-network payments like New York’s. In the first year after enactment in 2020, the Texas Department of Insurance received almost 49,000 dispute resolution requests, despite the state’s law only applying to about 5.8 million Texans.”

If a state the size of Texas received 49,000 disputes after it passed its own billing protections, it strains credulity to think the New York estimate of 17,000 could give an accurate picture of the whole country. Let’s be frank, we’ve had nearly five years of experience to get a sense of what volume of disputes would end up in arbitration. Mrs. Boudreaux’s multi-billion dollar company, whose business is forecasting and pricing risk, can’t be ignorant of this.

Second, Boudreaux’s claim about arbitration awards being “429 to 450%” of some benchmark is deeply misleading. The NSA’s independent dispute resolution (IDR) process is decided by a certified, third-party IDR entity (IDRE), and outcomes are driven by the evidence, including insurers’ own payment offers. If awards are consistently higher than what insurers propose, she should conclude that insurers are systematically underpaying healthcare providers. 

Third, we can assume she’s referring to 450% of the qualifying payment amount, or QPA. This is supposed to serve as a helpful benchmark representing median in-network rates. But in truth it’s concocted by insurers alone and regularly fails to reflect those rates. A recent study demonstrated that in 65% of cases submitted to federal IDR, the QPA was lower than in-network rates. The study’s authors determined this by matching the exact CPT codes, insurers, and geographic areas from the disputes to the insurers self-reported in-network rates. 

Most importantly, none of this explains why Elevance (which owns Anthem) would fail to pay after arbitration has concluded. There is simply a bill owed and a legal obligation to pay it within the 30-day window outlined in the legislation. Delayed payments don’t just inconvenience providers. They threaten the stability of medical practices and essentially affect the treatment patients need. 

If Elevance is paying its IDR awards on time, it should say so. If it isn’t, then Congress and regulators should ask why a multi-billion-dollar company believes the rules don’t apply to them. Because in healthcare, and every other industry, “we didn’t expect this much work” is not an excuse for failing to follow the law.