No Surprises, New Developments: Louisiana Enacts New Law Protecting Health Care Facilities from Payer Penalties Related to Out-of-Network Clinicians

In a significant development for health care providers navigating the post-No Surprises Act (“NSA”) landscape, Louisiana has enacted Act No. 791 (“House Bill 291”), legislation designed to protect participating health care facilities from adverse payer actions based on the network status of other providers involved in a patient’s care. The new law prohibits health insurers from reducing payments or terminating provider agreements simply because an out-of-network clinician contributed to a patient’s treatment. In doing so, Louisiana becomes one of the first states to confront a growing category of payer practices that have emerged in the wake of the NSA.

A copy of the enacted legislation is available here.

Background on the No Surprises Act

The NSA, enacted in December 2020 and effective January 1, 2022, prohibits providers from balance billing patients for certain out-of-network emergency services and certain services furnished by out-of-network providers at in-network facilities. Instead, payment disputes between providers and payers must be resolved through negotiation or a federal Independent Dispute Resolution (“IDR”) process. Although the NSA established a comprehensive federal framework for resolving reimbursement disputes, it did not eliminate the economic incentives that shape payer reimbursement policies and provider contracting decisions. In the years since the NSA took effect, some insurers have adopted reimbursement practices that seek to discourage the use of out-of-network clinicians by reducing payments to otherwise participating facilities. These policies have generated increasing concern among providers and policymakers alike, prompting a growing number of state legislatures to consider measures designed to preserve provider contracting autonomy and reinforce the dispute-resolution framework Congress established under the NSA.

States Begin to Counter Payer Pressure Tactics

Earlier this year, Indiana enacted similar legislation restricting certain payer practices affecting facilities that work with out-of-network providers. Louisiana now joins Indiana in addressing these practices. Whether these two enactments signal the beginning of a broader legislative response to payer pressure tactics remains to be seen, but together they suggest that what appeared to be isolated disputes over reimbursement may be drawing the attention of state policymakers. Should other state legislatures follow suit and scrutinize similar payer strategies, providers could find themselves operating under a growing body of state law designed to preserve the balance Congress sought to establish through the NSA. Louisiana’s new law is noteworthy not simply because it protects patients and providers, but because it reflects an emerging willingness among some state legislatures to intervene when payer practices threaten patient access or to alter the balance established under the NSA.

The out-of-network penalty halted by Indiana and Louisiana law has been incorrectly framed as a fight among insurers, facilities, and physicians. Missing from the conversation is the very real risk such a penalty creates for patients. Whether or not a health insurance plan meets a state’s standards for network adequacy, some patients (especially those with complex care needs) may require care from a physician outside of their insurance network. In such circumstances, hospital-based care teams are trained to prioritize patient outcomes, not health insurer profits. Thus, as Indiana and Louisiana have recognized, physicians must be allowed to use their medical judgment to recommend the right care plan, even if that care plan includes out-of-network specialists. As clinical care teams are not responsible for health insurer networks, threatening those providers with penalties when those networks fail to mee a patient’s care creates a perverse incentive designed around insurer costs instead of patient outcomes. Indiana and Louisiana have recognized that reality and responded accordingly: penalizing physicians for treating patients is not network management – it is patient abandonment.

Louisiana Draws a Line in the Sand on Payer Pressure

Against this backdrop of emerging payer pressure tactics, Louisiana’s response is both direct and significant. The centerpiece of HB 291 is a prohibition preventing health insurers from reducing reimbursement, suspending provider agreements, or terminating a participating facility’s contract solely because another health care provider involved in the patient’s care is not participating in the insurer’s network. Practically speaking, this means an insurer may no longer penalize an in-network hospital, ambulatory surgery center, or other licensed health care facility simply because care was furnished alongside an out-of-network physician, anesthesiologist, radiologist, pathologist, emergency physician, or other clinician.

Like Indiana’s recently enacted legislation, Louisiana’s law appears aimed at an emerging category of payer reimbursement practices that seek to influence provider contracting decisions by placing financial pressure on participating facilities rather than resolving payment disputes directly with out-of-network providers through the negotiation and arbitration mechanisms established by the NSA. By prohibiting payers from conditioning facility reimbursement on the network participation of independent clinicians, the legislation reinforces a central principle underlying the NSA: disputes over reimbursement should be resolved through the statutory payment process – not by indirectly discouraging lawful out-of-network care arrangements.

Louisiana’s legislation also gives these protections meaningful enforcement teeth. HB 291 provides that its requirements cannot be waived by contract, rendering void any contractual provision that conflicts with – or attempts to waive – the bill’s protections. It further classifies violations as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance, subjecting noncompliant insurers to regulatory enforcement under Louisiana law. Taken together, these provisions grant providers and facilities with more than simply a statutory right – they establish a regulatory framework designed to deter payer practices that undermine the protections the Legislature has now put in place. The result is more than merely a provider protection – it is a clear legislative rejection of payer pressure tactics that operate outside the framework established by the NSA.

What’s Up Next? The Start of a Legislative Trend?

Louisiana’s enactment of HB 291 raises the question of whether an emerging legislative trend is taking shape. As implementation of the NSA matures, state policymakers are increasingly looking beyond the mechanics of the federal arbitration process – scrutinizing payer practices that undermine the balance Congress sought to establish between providers and payers. While Indiana addressed both high-volume IDR administration and payer reimbursement practices, Louisiana takes a more targeted approach, protecting patients and participating facilities from access restrictions and financial penalties tied to the network status of independent clinicians. Despite these differences, both laws reflect a common objective: preserving providers’ ability to structure patient care independently of financial coercion outside the federal reimbursement process. Two states, of course, do not make a trend – but they may mark an inflection point. Whether additional states follow remains to be seen. Regardless, providers operating across multiple jurisdictions should monitor these developments closely, as state legislatures’ interest in payer practices affecting network participation and reimbursement under the NSA may be only beginning.

HaloMD is closely monitoring developments in this area. For additional insights into this and related regulatory developments, visit our News & Resources page.