Maine Legislature Balks at Site-of-Service Facility Fee Restrictions

Digital Debut

Maine Legislature Balks at Site-of-Service Facility Fee Restrictions

State task force recommends further consideration of restrictions on ASCs

BY STEPHEN ABRESCH | FEBRUARY 16, 2024

During a February 6, 2024, hearing of the Maine State Legislature's Joint Standing Committee on Health Coverage, Insurance and Financial Services, the committee voted 7–5 to report out legislation related to transparency recommendations and restrictions on facility fees associated with telehealth services. The committee said it needed more research to determine the real consequences of restricting facility fees based on site of service before endorsing any new legislation on the issue.

Facility fees are an essential part of what allows ASCs to operate.

The Maine Task Force to Evaluate the Impact of Facility Fees on Patients released its final recommendations to the legislature for consideration on January 31 during the 2024 legislative session. The task force, created by legislation enacted in 2023, had been charged with studying facility fees to provide the legislature with a better understanding of the issue in anticipation of further attempts to address concerns around the use of facility fees.

Background

Senator Troy Jackson introduced LD 1795, An Act to Protect Patients by Prohibiting Certain Medical Facility Fees, on April 25, 2023. On introduction, LD 1795 would have prohibited healthcare providers, defined broadly, from charging facility fees for services provided outside of a hospital’s main campus.

As elsewhere, supporters described the proposal as an easy way for legislators to target hospital billing practices that contribute to the growth of healthcare costs in the state. Supporters like America’s Health Insurance Plans (AHIP) and United States of Care used their testimony to paint facility fees as made-up fees created by hospitals to extract more money from patients seeking care at facilities, like physician offices, that have been bought by hospitals or large health systems. AHIP even encouraged the legislature to expand the scope of the proposal to affect other healthcare providers.

However, testimony from stakeholders such as the Maine Medical Association and the Maine Hospital Association highlighted the danger posed by attempts to restrict facility fees, noting that the legislation would essentially implement price controls on healthcare providers for the benefit of carriers. A letter from the director of MaineCare also highlighted complications the bill would cause for administration of the state’s Medicaid program.

Opposition to the proposal was enough to give legislators pause, and the bill was amended on June 15, 2023. The amendment removed the facility fee restriction provisions and inserted language creating the task force to study the issue over the interim and requiring the Maine Health Data Organization to publish an annual report on the amount paid by insurers to reimburse facility fees. Governor Janet Mills signed the amended bill into law on July 10, 2023.

Task Force Recommendations

The task force met three times in December of 2023 to receive testimony and develop its recommendations to the legislature. Despite research done on Maine’s own laws on facility fees, laws enacted by other states and the federal government all showing a recognition of ASCs also charging these fees, many of the organizations that submitted testimony to the taskforce continued to discuss the issue as if it only affects hospitals. Organizations like Consumers for Affordable Health Care, Harvard Pilgrim Health Care and the National Academy for State Health Policy provided testimony and policy recommendations that focused solely on hospitals and neglected to take surgery centers into account. Even discussion of Connecticut’s restrictions on facility fees, enacted in 2023, failed to mention that ASCs were explicitly excluded from those restrictions because the Connecticut General Assembly recognized it would amount to a death sentence for the ASC model in the state. Once again, the Maine Medical Association provided testimony highlighting the importance of facility fees to both hospitals and ASCs in hopes of convincing the task force to avoid making any rash recommendations.

In its final recommendations, the task force identified six areas for the legislature to focus on: the definition of “facility fee”; data collection and reporting associated with facility fees; notice or transparency requirements related to facility fees; limitations on facility fees associated with telehealth services; limitations on facility fees based on location or type of service; and assistance to patients experiencing general billing issues, including billing of facility fees. Regarding the definition of “facility fee,” the task force explicitly stated that the legislature should consider “whether charges billed by ambulatory care facilities or other independent non-hospital-based facilities should be included in the scope of any legislation limiting the charging of a facility fee.” The task force also recommended the legislature reconsider limitations on facility fees based on site of service, as it had in the original version of LD 1795.

The task force’s recommendations had to be reviewed by the legislature. During the February 6 hearing of the Committee on Health Coverage, Insurance and Financial Services, legislators heard from task force members and debated the recommendations put before them. Committee members expressed unease with the recommendations to restrict facility fees based on site of service, saying they felt the chance for disaster was too great. Many committee members said they were only comfortable with the facility fee transparency proposals included in the recommendations before coming to the 7–5 decision. After the vote was recorded, one committee member remarked, “I don’t think we’re ready for this.”

Write Stephen Abresch at sabresch@ascassociation.org with any questions.