Facility Fees
A bill under consideration by the state legislature – House Bill (HB) 23-1215 – would ban hospitals from collecting “facility fees” for outpatient care. This could decimate Coloradan’s access to care. Specifically, the bill:
- Will have catastrophic consequences – Half of Colorado’s hospitals, in both rural and urban areas, are operating with unsustainable finances. This bill would cut $9 billion more from hospitals and health systems, making 96% of hospitals financially unsustainable.
- Disrupts gains in patient care – Colorado has invested heavily in an integrated model of care and is starting to see the benefits of that, with lower per capita hospital costs, and patients getting care at the right time and right place.
- Threatens access and adds expense – This could include all outpatient care, including on-campus and off-campus locations, and charges not labeled as a “facility fee.” Removing all payment for outpatient care beyond the doctor will force locations to close and will result in more emergency department usage and inpatient care, driving up health care costs for everyone.
What are facility fees?
A “facility fee” is better described as an outpatient care payment. It has little to do with the actual facility, and pays for the nurses, techs, environmental services, interpreters, security personnel, and many others that help provide care in outpatient clinics.
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.
What is outpatient care?
Outpatient care is simply any care or procedure that requires a stay shorter than 24 hours, even if it happens overnight or within the walls of a hospital. The majority of outpatient care is provided in community clinics where patients can get primary care, behavioral health care, cancer infusions, and many other kinds of specialty care.
Outpatient care is more affordable, accessible, and comfortable for patients. Hospitals have worked hard over the years to shift more care to outpatient settings instead of more expensive care locations. This model, known as integrated care, ensures patients can access the right care at the right time.
How does Colorado compare?
Coloradans enjoy some of the best, and most affordable, hospital care in the country.
in the country for lowest percent of household income spent on hospital care (Commonwealth Fund)
second best state for avoidable ED use (Commonwealth Fund)
third best state for avoidable hospital use and cost (Commonwealth Fund)
What else?
- Colorado hospital costs were $692 per person lower than the U.S. average (CMS National Health Expenditure Data)
- Coloradans spent 4.1% of household income on hospital care – the second lowest amount in U.S. (CMS National Health Expenditure Data)
- 7th lowest benchmark insurance premiums (2023 data)
- 11th lowest of 46 reporting states in hospital prices (Commonwealth Fund)
- 12th best on multi-point ranking (Commonwealth Fund)
But there’s more work to do
Unfortunately, Colorado continues to score poorly on access to behavioral health care:
- 3rd WORST for adults with unmet behavioral health needs (Commonwealth Fund)
- 6th WORST for suicide deaths (Commonwealth Fund)
- 5th WORST for alcohol-related deaths (Commonwealth Fund)
Coloradans desperately need access to outpatient behavioral health care, and many hospitals have begun integrating behavioral care into their outpatient clinics. If those clinics are forced to close, Coloradans will have even less access to behavioral health care.
In the News
Majority of Colorado hospital systems lost money in 2022 as costs surged, stock market tanked
The Denver Post (March 19)
Colorado’s push to lower hospital costs has a catch: The state also needs hospitals’ money
The Colorado Sun (March 15)
GUEST COLUMN: Legislation would undermine Colorado health care
The Gazette (March 15)
Colorado lawmakers are targeting hospital facility fees. Here’s why that’s a big deal.
The Colorado Sun (March 1)
Hospitals decry bill banning 'facility fees,' supporters call it more 'surprise billing'
Colorado Politics (Feb. 24)
Colorado hospitals warn of 'catastrophic' consequences of proposed bill
Denver Business Journal (Feb. 23)