Digital Debut
Facility Fee Proposals Back on the Agenda This Year
Whether transparency or restrictions, states pursue changes
BY STEPHEN ABRESCH | JANUARY 31, 2025
This year’s state legislative sessions are well underway, with all 50 states actively meeting in 2025. While legislative agendas are being loaded with a variety of healthcare issues, proposals related to facility fees sit at the top of ASCA’s legislative watch list.
Despite extensive lobbying and education efforts undertaken by the Texas Ambulatory Surgery Center Society (TASCS) and ASCA against HB 1692 during the 2023 session, Texas House Representative Tom Oliverson, MD, introduced legislation containing similar provisions (HB 2075). The measure would prohibit a healthcare provider from charging a facility fee for healthcare services unless the services are provided on a hospital campus or are emergency care. Early analysis suggests ASCs are once again swept up in the bill’s provisions. The sponsor, who is a board-certified anesthesiologist and serves as chairman of the Texas House Committee on Insurance, held an interim hearing on facility fees in 2024, presaging further focus on the issue this year.
Legislators in Oregon introduced SB 539, a measure aimed at hospitals, health systems and “hospital-based facilities.” The measure imposes notification requirements on charging facility fees and prohibits charging facility fees except when services are provided on a hospital’s main campus or at a hospital-based facility that includes an emergency department. While the definition of “hospital-based facilities” likely would capture ASCs with any level of hospital ownership, the Oregon Ambulatory Surgery Center Association (OASCA) has indicated that the definition for “facility fee” in the bill tracks closely with what is used in Colorado statute, which the Colorado Ambulatory Surgery Center Association (CASCA) had helped write to exclude ASCs from Colorado’s restrictions on facility fees, enacted in 2023.
Legislators in Illinois have introduced two nearly identical measures, HB 1431 and HB 1434, to enact the Health Care Facility Fee Transparency Act, which would impose facility fee reporting requirements on hospitals, health systems and “hospital-based facilities” (defined in a way that would include ASCs with any level of hospital ownership, like in the Oregon legislation). HB 1431 goes a few steps further than just transparency requirements. The measure would prohibit healthcare providers and health systems from charging a facility fee directly to a patient for any preventive care services provided in an outpatient setting, any clinic visits and any other services that do not include an inpatient stay component. Additionally, the measure imposes new oversight requirements on business transactions that result in the establishment of a “hospital-based facility” at which facility fees may be billed. However, like the legislation in Oregon and the definition in Colorado statute, “facility fee” is defined in a way that could spare ASCs from the worst consequences of such proposals.
New York legislators kicked off their session by introducing companion measures aimed at restricting facility fees and imposing site-neutral reimbursement requirements on commercial reimbursements. SB 705 and its companion, AB 2140, would prohibit healthcare providers—including ASCs—from billing facility fees for “applicable services,” meaning outpatient or ambulatory items or services that can be safely provided across ambulatory care settings. These “applicable services” include any outpatient or ambulatory item or service recommended or required to be paid on a site-neutral basis by federal or state law, the US Department of Health and Human Services, or the Medicare Payment Advisory Commission (MedPAC) (including the 66 ambulatory payment classifications (APC) identified by MedPAC in its June 2023 Report to the Congress); the evaluation and management (E&M) office visit codes identified by MedPAC in its March 2012 Report to the Congress; and any other outpatient or ambulatory items or services designated as safe and appropriate to be provided in lower-cost settings. The measures would also restrict reimbursements for “applicable services” in commercial insurance contracts to the lower of the negotiated reimbursement rate or 150 percent of the Medicare rate, though it fails to identify which Medicare payment system the percentage would be based on.
Ohio, North Carolina and Washington State might also entertain facility fee legislation this year, either because of introductions in their previous sessions, focus on the issue during their interim, or both. ASCA is tracking these and other bills impacting ASCs across all 50 states. If you are interested in learning more about these proposals or becoming involved in ASCA’s advocacy efforts, write Stephen Abresch at sabresch@ascassociation.org.