Julia Burleson, Karen Davenport, Rachel Swindle, and Christine H. Monahan
Facility charges are prices billed by institutional well being care suppliers, similar to hospital outpatient departments (HOPDs), which are meant to cowl the operational prices of sustaining the power. When sufferers obtain providers in HOPDs, they sometimes generate two varieties of claims for a single go to: an institutional declare for the power charges and an expert declare for the clinician’s providers.
Some analyses have discovered that business insurers pay extra when care is delivered in hospital outpatient settings than in physicians’ workplaces for a similar service. Facility charges, mixed with hospital market energy, are a key driver of this value distinction. Nevertheless, limitations in claims knowledge can obscure when and the place outpatient facility charges are charged, which providers they’re hooked up to, and their contribution to total well being care spending. Institutional claims typically embrace addresses or Nationwide Supplier Identifiers (NPIs) for the broader well being system or flagship hospital somewhat than the precise web site of care. Analysts thus could not have the ability to determine which hospital areas are billing outpatient facility charges or how a lot income they’re producing from these charges. With out widespread identifiers throughout claims kinds, analysts may wrestle to hyperlink facility payment {and professional} charges charged for a similar service or go to. These inconsistencies, coupled with a lack of constant public visibility into self-funded employer plan claims extra usually, inhibit policymakers from readily assessing the total scope of outpatient facility charges within the business market.
In response, some states—together with Colorado, Maine, Connecticut, and Washington—have collected and analyzed knowledge on outpatient facility payment billing inside their borders. This rising curiosity displays a number of converging tendencies. Hospital outpatient utilization has elevated considerably over the previous few many years, and care delivered in HOPDs has usually develop into costlier in comparison with comparable care supplied in non-hospital settings. Supplier consolidation has widened these value gaps by rising hospitals’ negotiating energy in business markets by doctor follow acquisitions. On the identical time, progress in well being plan deductibles (in quantity and prevalence) over the previous decade and modifications to different points of insurance coverage plan profit designs have elevated the visibility of facility charges’ monetary influence to sufferers and policymakers alike.
Under, we discover states’ efforts and spotlight key findings for the business market from state experiences. As a result of variations in state definitions and reporting necessities for facility charges, findings aren’t all the time straight comparable throughout states. Nonetheless, these experiences present useful insights into facility payment billing and laws in several states.
Colorado
In 2023, Colorado established the Hospital Facility Payment Steering Committee in response to rising issues concerning the value and prevalence of outpatient facility charges. Whereas the invoice didn’t create annual reporting necessities, it tasked the committee with evaluating the influence of hospital facility charges in Colorado and reporting its findings to the legislature. The committee included client advocates and well being trade representatives and supplied a number of alternatives for public enter.
The committee’s evaluation relied closely on knowledge from the state All-Payer Claims Database (APCD), which incorporates 74 p.c of coated lives in Colorado from 2017 to 2022 however solely about 25 p.c of lives coated by Worker Retirement Earnings Safety Act-regulated self-funded worker well being plans.
Key Findings from Industrial Market Knowledge
- Outpatient Facility Payment Billing Permitted: Colorado doesn’t impose limitations on facility charges, together with for routine providers similar to analysis and administration (E&M) or clinic visits. (Hospitals can’t steadiness invoice sufferers for facility charges for preventive care, nonetheless.)
- Progress in Outpatient Facility Payment Funds: Between 2017 and 2022, whole outpatient facility payment reimbursement elevated by a median of 6.5 p.c per yr.
- Related Skilled Payment Funds No matter Setting: For the 25 most often billed CPT codes with the very best reimbursement quantities, the typical skilled payment paid to hospital-affiliated suppliers and impartial suppliers was practically the identical ($71.41 versus $69.60, respectively). Nevertheless, the committee was not capable of estimate the entire value of take care of providers delivered in HOPDs (skilled plus facility charges) attributable to knowledge constraints. Episodes of care typically contain a number of procedures carried out by totally different suppliers who invoice individually, and variations in billing practices create challenges in compiling and evaluating whole prices. Consequently, direct comparisons between the entire value of care delivered in HOPD versus workplace settings aren’t attainable utilizing the info on this report.
The committee report acknowledges just a few different necessary limitations as effectively. Though Colorado legislation requires off-campus hospital clinics to register for distinctive Nationwide Supplier Identifiers (NPIs), business claims knowledge typically nonetheless replicate the principle hospital or well being system somewhat than the precise clinic the place suppliers rendered providers. As well as, low response charges from key stakeholders, together with payers, employers, and hospitals, hindered the committee’s efforts to validate APCD findings.
Maine
In 2005, Maine enacted a facility payment prohibition for workplace visits, no matter whether or not that workplace is bodily positioned in a hospital facility. Nevertheless, hospitals could cost such charges for different kinds of care obtained in HOPDs, together with radiology and imaging providers, behavioral well being care, and procedures similar to colonoscopies.
In 2023, the state handed a facility payment transparency legislation requiring the state APCD to publish annual experiences on business outpatient facility payment funds. The APCD, which has claims knowledge for roughly 73 p.c of commercially insured residents within the state, launched its first report in 2024 and the knowledge for its second report in early 2025.
Key Findings from Industrial Market Knowledge
- Preliminary Non-Compliance Noticed: The primary report recognized ongoing facility payment prices for workplace visits, which it interpreted as E&M providers and preventive care, regardless of the statutory prohibition.
- Improved Compliance with Public Highlight: Within the first report, 33 p.c of amenities (49 out of 148) that billed for workplace visits additionally billed a facility payment a minimum of as soon as. By the 2025 report, this determine dropped to 9 p.c of amenities (16 out of 186).
- Decreased Break up-Billing whereas Median Fee Quantities Stay Degree: The variety of care episodes that included each a facility payment and an expert payment declined by 16 p.c between the 2 experiences. This decline was largely pushed by a 22 p.c drop in split-billing throughout three routine E&M codes for established sufferers. Regardless of this drop in split-billing, median whole funds elevated by a median of about $8 throughout the three codes. Notably, the report doesn’t point out the proportion of claims billed as institutional versus skilled.
Connecticut
Since 2015, Connecticut has required hospitals and well being techniques to report detailed outpatient facility payment knowledge, together with whole outpatient facility payment prices, whole variety of visits with facility charges by payer, and prices for the highest ten procedures with outpatient facility charges by income and utilization. For commercially insured and uninsured sufferers, the state initially prohibited facility charges for outpatient providers billed with E&M codes at off-campus amenities, aside from emergency division visits and sure commentary stays, extending the prohibition to evaluation and administration (A&M) codes in October 2022 and on-campus amenities in July 2024. (Sure contracts had been grandfathered for a time frame.) The state additionally banned facility charges for telehealth providers.
In 2023, the state revealed experiences with facility payment tendencies for off-campus HOPDs over a five-year interval and for on-campus HOPDs over a one-year interval. In addition they publish displays with extra data not included within the experiences.
Key Findings from Industrial Market Knowledge
- Facility Payment Income Elevated Considerably for Off- and On-Campus HOPDs: From 2019 to 2023, whole off-campus HOPD facility payment income rose 42 p.c, from $430 million to $611 million, and affected person visits involving facility charges elevated 12.8 p.c, from 1.22 million to 1.38 million. For on-campus HOPDs, from 2022 to 2023, whole facility payment income elevated 10.3 p.c, from $1.26 billion to $1.39 billion, and affected person visits with facility charges grew 5.4 p.c, from 1.68 million to 1.77 million.
- Larger Facility Charges per Go to for Industrial Insurers: On common, business insurance coverage paid 2.5 to three.5 occasions extra in facility charges per go to at on- and off-campus HOPDs than another payer, together with Medicare and Medicaid.
The experiences and displays don’t embrace common facility payment quantities by CPT codes, limiting the flexibility to match facility payment variations for particular person procedures throughout Medicare, Medicaid, and business insurers. Hospitals and hospital techniques are required to report knowledge yearly, and their filings are publicly out there within the Notifications and Filings database.
Washington
Starting in 2012, Washington State required hospitals with provider-based clinics offering diagnostic and therapeutic providers to incorporate a separate type for outpatient facility payment knowledge of their year-end monetary experiences to the Division of Well being. Below this statute, hospitals should report—per provider-based clinic—the variety of affected person visits, outpatient facility payment income, and outpatient facility payment allowed quantities by payer sort. Nevertheless, the present reporting construction aggregates this data by hospital, stopping significant evaluation of knowledge on the particular person clinic stage. Consequently, it isn’t attainable to hyperlink facility charges to particular providers or decide their influence on affected person out-of-pocket prices and total well being care spending. Regardless of this limitation, the info reveal appreciable variation in outpatient facility payment billing practices within the business sector throughout hospital techniques. As an illustration, in 2024, one hospital system reported a most outpatient facility payment of greater than $6,900 for a single affected person go to, whereas others reported most prices of lower than $200.
For the foreseeable future, Washington will proceed to gather yearly outpatient facility payment experiences from hospitals. Nevertheless, the Division of Well being shouldn’t be answerable for analyzing the submitted knowledge and lacks the authority to meaningfully implement compliance.
Trying Ahead
Regardless of variation in coverage design and knowledge evaluation, a constant narrative emerges throughout states: Outpatient facility charges are a rising concern for people with business insurance coverage. States are starting to make use of claims and hospital-reported knowledge to determine patterns of extreme or inappropriate facility payment billing in hospital outpatient settings.
By quantifying the expansion and distribution of outpatient facility charges, state experiences present a basis for insurance policies and market responses aimed toward curbing them. In Connecticut, strong knowledge assortment effort enabled policymakers to determine and shut gaps of their legislation, together with narrowing the grandfathering provision and lengthening the prohibition to A&M codes and on-campus amenities. In Maine, public reporting and elevated regulator consideration to outpatient facility charges helped immediate larger compliance with current legal guidelines over time. Some insurers and employer-purchasers may use these findings to renegotiate contracts or modify community designs, whereas shoppers with clear data might probably keep away from amenities charging excessive facility charges. Nevertheless, the effectiveness of transparency alone in addressing extreme or inappropriate facility payment billing will depend upon native market dynamics, together with the relative energy of hospitals, insurers, and state businesses.
State knowledge additionally present a launchpad for extra states to straight tackle affordability issues by substantive evidence-based facility payment reforms. By highlighting value variations between care settings for providers that may be safely and appropriately delivered outdoors of hospitals, these knowledge will help information focused coverage interventions. One choice is site-neutral cost reform, which eliminates incentives to shift care to higher-cost hospital departments by capping whole reimbursement for sure providers to not more than the quantity paid to freestanding settings similar to doctor workplaces or ambulatory surgical facilities. A much less aggressive various is to prohibit outpatient facility charges for specified providers or settings, with out regulating costs. Whereas this coverage could immediate hospital-affiliated suppliers to extend skilled charges to offset misplaced income—as could have occurred in Maine—it may well nonetheless supply shoppers significant out-of-pocket protections. With both sort of reform, higher knowledge would assist policymakers decide which settings and providers to focus on and what, if any, exceptions ought to apply.
As extra states confront rising business well being care prices, the experiences of Colorado, Connecticut, Maine, and Washington supply useful classes on how knowledge can determine high-cost billing practices and assist form well being care affordability reforms.
Julia Burleson, Karen Davenport, Rachel Swindle, and Christine H. Monahan “State Efforts To Monitor Outpatient Facility Charges” October 6, 2025, https://www-healthaffairs-org.proxy.library.georgetown.edu/content material/forefront/state-efforts-monitor-outpatient-facility-fees. Copyright © 2025 Well being Affairs by Challenge HOPE – The Folks-to-Folks Well being Basis, Inc.
