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Michigan Introduces Facility Fee Restriction Legislation

Proposed act would prohibit ASCs from charging facility fees

BY STEPHEN ABRESCH | APRIL 8, 2026

Michigan HB 5770 would disallow, beginning January 1, 2027, healthcare providers, including ASCs, from charging facility fees for the following: professional medical services provided through telemedicine; professional medical services provided in a facility that is not a hospital; and professional medical services provided to a patient who is receiving outpatient service in a hospital, unless that service is provided in an emergency room or is an observation service. The bill defines “facility fee” as a fee that meets all the following criteria: the fee is charged or billed by a healthcare provider; the fee is intended to compensate the healthcare provider for the operational expenses of the healthcare provider; and the fee is separate and distinct from a professional fee.

Michigan state Representatives Curtis VanderWall (R) and Reggie Miller (D) introduced the bill last month.

If enacted, the bill would be catastrophic for ASCs in Michigan. Facility fees in ASCs are the facility’s reimbursement for services provided there and account for all other costs of a patient’s care besides the professional fee paid to the physician for their services. This includes nursing services, technician and related services, administrative services, and the cost of supplies like drugs used during the procedure, biologicals, surgical dressings, surgical supplies and anesthesia materials. Without facility reimbursements, ASCs cannot pay for the services and supplies needed to perform surgery and will not be able to stay in business. The loss of all ASCs in a state would blow a huge hole in the state’s outpatient surgical capacity, resulting in longer wait times for necessary procedures and higher costs for patients and insurers as hospitals and hospital outpatient departments become essentially the only site of service where patients can receive outpatient surgical care.

Proposals to prohibit facility fees gained noticeable traction at the state level in the early 2020s as concerns grew around the effect of hospital consolidation on healthcare costs. Organizations like Arnold Ventures, America’s Health Insurance Plans, National Academy for State Health Policy and Families USA have advocated for site-of-service restrictions on facility fees at the state and federal levels as a way for policymakers to rein in the growth of healthcare costs. Instances of hospitals purchasing off-campus locations, like physician offices, and then charging hospital facility fees for services provided at these offices, bolstered these organizations’ narrative that facility fees are made-up charges designed to line the pockets of hospital executives when charged for services provided at any location but a hospital’s main campus or a freestanding emergency department.

Despite ASCs not being implicated by the concerns driving these proposals, legislation restricting facility fees is often written so broadly that ASCs are included in the restrictions. Since Texas started the trend with the introduction of HB 1692 during its 2023 legislative session, ASCA has tracked legislation in 12 other states—California, Colorado, Connecticut, Illinois, Massachusetts, Maine, Michigan, New York, North Carolina, Ohio, Oregon and Washington—that, if enacted, would have prohibited ASCs from charging facility fees. As these proposals received consideration, it became evident that both advocacy organizations and lawmakers were largely unaware of the existence of ASCs, the scope of the restrictions proposed, what entail facility fees and, more generally, how pricing works in healthcare. Thanks to the advocacy works of state ASC associations and ASCA, these proposals have either failed to be enacted or had provisions impacting ASCs removed prior to enactment. However, more work needs to be done to convince these organizations and lawmakers of the damage they would cause by enacting these proposals.

Protecting ASCs from restrictions on facility fees is one of ASCA’s top priorities, and it stands ready to assist in any jurisdiction where facility fee restrictions are proposed. If you have any questions about legislative proposals on facility fees or are interested in getting involved in ASC advocacy, write Stephen Abresch at sabresch@ascassociation.org.