Facility Fees
What You Need to Know:
Facility fees are best described as “care-team fees” – they pay for the people (other than doctors) involved in care provided in outpatient clinics. These payments have little to do with the actual facility – they pay for the nurses, techs, environmental services, interpreters, security personnel, and many others that help provide care in outpatient clinics. In many cases, facility fees are the only source of income hospitals have to pay the clinical and support staff that take care of patients in clinics.
Key Points/Hospital Perspective:
- Facility fees support the cost of patient care teams in hospital outpatient clinics, including more than 100,000 Coloradans working as nurses, lab technicians, custodial staff, billing specialists, coverage navigators, interpreters, and other health care professionals.
- More people have access to convenient preventive and specialized care in clinics paid through facility fees, improving quality and keeping patients out of more expensive settings like the emergency room and hospital inpatient departments.
- A ban or limitations on facility fees would devastate the health care ecosystem in Colorado and reduce access for patients statewide.
CHA Contact: Bridget Frazier, senior manager of public policy | [email protected]
When a patient seeks outpatient care, their bill will have two components. The first, known as a provider fee, pays the doctor for their time. The second is a facility fee, which may or may not be labeled as such on the bill. Any charges for an office visit and/or procedures will include a facility fee. Those charges are what pay the staff that provide care.
Unlike independent clinics, hospital outpatient clinics are required to bill facility fees and provider fees separately by the Centers for Medicare and Medicaid Services and many private insurance carriers.
In 2023, the General Assembly passed House Bill 23-1215 – Limits On Hospital Facility Fees – that limits facility fees for certain preventive services, authorizes a study into the impact of facility fees on the health care system in Colorado and increases transparency about when facility fees might be charged.
HB 23-1215 had a direct impact on hospitals, starting July 1, 2024, related to facility fees for preventive services, billing disclosures, and change of ownership:
- Preventive Services: A provider or health system cannot charge, bill, or collect a facility fee directly from a patient that is not covered by a patient’s insurance for preventive health care services in accordance with state and federal law. This section does not apply to critical access hospitals, sole community hospitals (or affiliated clinics) in rural or frontier areas, or Denver Health.
- Billing Disclosures: Providers affiliated with or owned by a hospital or health system must provide a notice to patients that a facility fee may be charged as well as the amount of the facility fee at the time an appointment is scheduled as well as when the service is provided.
- Change of Ownership: A health facility newly affiliated with or owned by a hospital or health system must provide written notice to each patient seen within the previous year noting the change of ownership and that the patient may be billed for a facility fee. Facility fees cannot be collected until at least 30 days after the notice is mailed.
HB 23-1215 requires a report on the impact of hospital facility fees in Colorado to be delivered to the General Assembly by Oct. 1, 2024. The report will be overseen by a steering committee that includes representatives from consumer advocacy groups, hospitals, independent outpatient facilities, insurers, and the state’s Medicaid agency.
Learn more about the steering committee, including who’s on the committee and meeting materials online here.
