The Colorado House Health and Insurance Committee advanced House Bill 1215 to appropriations on Friday, described by bill sponsors as a consumer protection measure aimed at promoting medical billing transparency.
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The bill would prohibit providers from charging hospital-associated “facility fees” for certain outpatient (primary care, telehealth, and preventive care) services in non-hospital settings, but critical access and community hospitals, including Denver Health and those in rural areas, would be exempt from the restriction.
The bill sponsors said provider consolidation has led to policies driving the issuance of facility fees.
“There has been a tremendous amount of market consolidation and expansion in our healthcare system, whereby hospital systems have been buying up practices, especially along the front range,” Rep. Emily Sirota (D – Denver) said. “And so many consumers have started to see these hidden charges on their bills, sometimes called facility fees, on top of what patients are already paying for the cost of their medical services.
The amounts of these fees can vary widely from hundreds to thousands of dollars, and often in excess of the medical care itself. And right now, there’s not really much transparency for patients to understand these fees and how they will be applied in the amount that they will be applied in, and it makes it impossible for families to budget or plan for their healthcare expenses.”
Another component of the bill would be to work with the Colorado Hospital Association (CHA) and other stakeholders to gather critical data around facility fees, increase transparency for consumers, and place common-sense limits on what can be charged. Committee members heard testimony both in support of and against the bill.
Representatives from the Colorado University hospital system, Memorial Regional Health, and Denver Health testified against the bill saying facility fees are an important part of health system administration.
“The services provided via facility fee are essential to the delivery of care even when there is telehealth because there are support services,” said Donna Lynne, CEO of Denver Health. “It is not like the physician just turns on that screen. And that’s everything that’s out there.”
Patients, employers, policy experts, and consumer advocates testified in support of the legislation, complaining the fees are often exorbitant, have nothing to do with the care administered, and show up on medical bills without any consultation or warning.
Isabel Cruz, policy director for the Colorado Consumer Health Initiative, said the bill will provide needed clarity on the impact the fees are having on consumers.
“A growing body of research has shown that big system mergers, expansions, and clinic acquisitions are not leading to a rosy picture of improved care,” Cruz said. “They are associated with increased costs, with very little evidence of improved quality of care, and some evidence of worse outcomes for patients.
Facility fees, as part of the larger picture of significant payment differentials between independent and hospital-affiliated outpatient sites that are driving consolidation, must be addressed to correct market failures and improve healthcare, affordability, access, and value in our state.”