Limits On Hospital Facility Fees

On and after July 1, 2024, the act prohibits a health-care provider (provider), which is an individual provider or a health facility, or a health system, which is a corporation or organization that owns, contains, or operates 3 or more hospitals, from charging, billing, or collecting a facility fee directly from a patient that is not covered by the patient's insurance for mandatory coverage for preventive health-care services that are provided in an outpatient setting. The act defines "facility fee" as any fee that a hospital or health system charges or bills for outpatient services that is intended to compensate the hospital or health system for its operational expenses and that is separate and distinct from a professional fee charged or billed by a provider for professional medical services. The limitation on charging, billing, or collecting a facility fee does not apply to a critical access hospital, a sole community hospital in a rural or frontier area, a community clinic affiliated with a sole community hospital in a rural or frontier area, or a hospital established by the Denver health and hospital authority.

The act:

• Requires a provider that charges a facility fee to provide notice to a patient that the provider charges the fee and to use a standardized bill that includes itemized charges identifying the facility fee, as well as other information;
• Requires a health facility that is newly affiliated with or owned by a hospital or health system on or after July 1, 2024, to provide written notice to patients of the health facility during the previous 12 months concerning the change in ownership and that the health facility may now charge a facility fee, and prohibits the collection of a facility fee until at least 30 days after the notice is sent; and
• Makes it a deceptive trade practice to charge, bill, or collect a facility fee when doing so is prohibited.

The act creates a steering committee (steering committee) in the department of health care policy and financing (department) to facilitate the development of a preliminary report by August 1, 2024, and a final report by October 1, 2024, detailing the impact of outpatient facility fees on the Colorado health-care system, including the impact on consumers, employers, and providers.

The steering committee consists of 7 members appointed by the governor with relevant expertise in health-care billing and payment policy, including, among others, members representing consumers, payers, and providers. The act lists specific data and information to be collected, identified, evaluated, and analyzed, including:

• Data from:
• The all-payer health-claims database;
• Hospital and health systems;
• The department, the division of insurance, and commercial payers; and
• Independent health-care providers that are not affiliated with or owned by a hospital or health system evaluated in the report;
• The impact of facility fees and payer coverage policies on the Colorado healthcare affordability and sustainability enterprise, the medicaid expansion, uncompensated care, and undercompensated care;
• The impact of facility fees on access to care, integrated care systems, health equity, and the health-care workforce; and
• A description of the way in which providers may be paid or reimbursed by payers for outpatient health-care services.

To the extent feasible, data must be sourced from 2014 through 2022, as determined by the steering committee and any third-party contractors, and disaggregated, as described in the act. The steering committee shall seek to exhaust existing data sources before making additional requests and shall minimize the number of data requests.

To implement the act, for the 2023-24 state fiscal year, the act:

• Increases general fund appropriations to the department in the 2023 long bill by $18,326 for personal services and $337 for operating expenses;
• Decreases anticipated federal funds received by the department by $18,663; and
• Appropriates $516,950 from the general fund to the department for general professional services and special projects.

APPROVED by Governor May 30, 2023

EFFECTIVE May 30, 2023
(Note: This summary applies to this bill as enacted.)