A proposal in the Colorado legislature would ban “facility fees” from certain medical bills, a move the legislation’s sponsors say will save patients from unexpected costs while hospitals argue it would threaten access to health care.

When you get a medical bill, you’ll likely be charged a provider fee (for the doctor or physician associate’s time) and a facility fee, if the clinic where you got care is owned by a hospital. You could also be charged separately for any medications you received or supplies used to treat you.

House Bill 23-1215 would prohibit facility fees if the care is provided via telemedicine, or in a clinic that’s owned by a hospital but not located on its campus. It also would ban facility fees for procedures that can be performed safely somewhere other than a hospital.

The Colorado Medical Services Board would be required to define which services could safely be performed somewhere other than a hospital by the end of March 2024. They could conceivably include almost all imaging services, office visits and at least some minor surgeries.

Other provisions in the bill would:

Require providers to notify patients when they could be charged facility fees
Direct Colorado’s All Payer Claims Database, which aggregates information about what insurers pay for health care, to compile a report about facility fees
Make it a “deceptive trade practice” to charge a facility fee when it’s been banned, which would allow the Colorado Attorney General’s Office to investigate

“We have heard from patients across Colorado who are getting bills with unexpected fees of over a thousand dollars with no explanation on top of what they pay through insurance,” Rep. Emily Sirota, a Denver Democrat and one of the bill’s sponsors, said in a news release. “Facility fees are simply another way that hospital CEOs are lining their pockets at the expense of patients, and we simply can’t let this continue.”

The other sponsors are Rep. Andrew Boesenecker, a Fort Collins Democrat; Sen. Kyle Mullica, a Thornton Democrat; and Sen. Lisa Cutter, a Littleton Democrat.

Julie Lonborg, vice president of communications and media relations at the Colorado Hospital Association, said facility fees pay for support staff like technicians, front desk workers, nurses and the people who handle medical records, information technology and cleaning. Even when the patient has a telehealth visit and isn’t in the building, they need that infrastructure, she said.

Dr. Steven Federico, chief government and community affairs officer at Denver Health, estimated the bill could cost the hospital about $97 million. If it passed, Denver Health would have no way to pay for care coordination and could have to reduce outpatient services, he said.

“Twenty-first century care is really outpatient care, and furthermore it’s team-based care,” he said. “If facility fees were eliminated, we would not be able to provide 21st century care.”

Diane Kruse, of Conifer, said she thought she had done everything necessary by making sure the hospital-owned clinic where her husband sought cardiology care was in their insurance network. Then they started getting additional bills, which added up to $476 for facility fees across three visits, she said.

If they had known there would be extra fees for using a hospital clinic, they would have gone to an independent cardiology practice, Kruse said.

“We literally could have saved hundreds of dollars,” she said. “They bill you more just because they’re owned by a hospital.”

Dan Weaver, spokesman for UCHealth, said that without facility fees, it wouldn’t be possible to provide outpatient care. If people can’t get preventive care, their conditions will worsen and they’ll end up hospitalized, he said.

“We’re concerned about lack of access,” he said. “That facility fee is the only thing that covers all of those people who are necessary for patient care.”

Mullica countered that the fees themselves are what keep people from getting needed care.

“No one should have to make the choice between paying for health care or paying for groceries or heat, especially when these fees are in the fine print during regular health care visits with no explanation of what these fees are for,” he said in a news release.

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