Julia Burleson, Karen Davenport, Rachel Swindle, and Christine H. Monahan
Facility charges are costs billed by institutional well being care suppliers, akin to hospital outpatient departments (HOPDs), which can be supposed to cowl the operational prices of sustaining the power. When sufferers obtain companies 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 companies.
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 worth distinction. Nevertheless, limitations in claims information can obscure when and the place outpatient facility charges are charged, which companies they’re connected to, and their contribution to total well being care spending. Institutional claims usually embody addresses or Nationwide Supplier Identifiers (NPIs) for the broader well being system or flagship hospital reasonably than the precise web site of care. Analysts thus could not be capable of determine which hospital places are billing outpatient facility charges or how a lot income they’re producing from these charges. With out frequent identifiers throughout claims varieties, analysts may additionally wrestle to hyperlink facility charge {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 information on outpatient facility charge 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 change into dearer in comparison with comparable care offered in non-hospital settings. Supplier consolidation has widened these worth gaps by rising hospitals’ negotiating energy in business markets by way of doctor apply acquisitions. On the identical time, development in well being plan deductibles (in quantity and prevalence) over the previous decade and adjustments to different elements 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 stories. Because of variations in state definitions and reporting necessities for facility charges, findings will not be all the time straight comparable throughout states. Nonetheless, these stories present worthwhile insights into facility charge billing and laws in numerous states.
Colorado
In 2023, Colorado established the Hospital Facility Charge Steering Committee in response to rising issues concerning the worth 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 business representatives and offered a number of alternatives for public enter.
The committee’s evaluation relied closely on information from the state All-Payer Claims Database (APCD), which incorporates 74 % of coated lives in Colorado from 2017 to 2022 however solely about 25 % of lives coated by Worker Retirement Earnings Safety Act-regulated self-funded worker well being plans.
Key Findings from Business Market Information
- Outpatient Facility Charge Billing Permitted: Colorado doesn’t impose limitations on facility charges, together with for routine companies akin to analysis and administration (E&M) or clinic visits. (Hospitals can’t stability invoice sufferers for facility charges for preventive care, nevertheless.)
- Progress in Outpatient Facility Charge Funds: Between 2017 and 2022, whole outpatient facility charge reimbursement elevated by a median of 6.5 % per yr.
- Related Skilled Charge Funds No matter Setting: For the 25 most incessantly billed CPT codes with the best reimbursement quantities, the common skilled charge paid to hospital-affiliated suppliers and unbiased 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 companies delivered in HOPDs (skilled plus facility charges) as a consequence of information constraints. Episodes of care usually 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 will not be doable utilizing the info on this report.
The committee report acknowledges a couple of different necessary limitations as nicely. Though Colorado regulation requires off-campus hospital clinics to register for distinctive Nationwide Supplier Identifiers (NPIs), business claims information usually nonetheless replicate the principle hospital or well being system reasonably than the particular clinic the place suppliers rendered companies. 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 charge 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 companies, behavioral well being care, and procedures akin to colonoscopies.
In 2023, the state handed a facility charge transparency regulation requiring the state APCD to publish annual stories on business outpatient facility charge funds. The APCD, which has claims information for about 73 % of commercially insured residents within the state, launched its first report in 2024 and the information for its second report in early 2025.
Key Findings from Business Market Information
- Preliminary Non-Compliance Noticed: The primary report recognized ongoing facility charge costs for workplace visits, which it interpreted as E&M companies and preventive care, regardless of the statutory prohibition.
- Improved Compliance with Public Highlight: Within the first report, 33 % of services (49 out of 148) that billed for workplace visits additionally billed a facility charge not less than as soon as. By the 2025 report, this determine dropped to 9 % of services (16 out of 186).
- Decreased Cut up-Billing whereas Median Cost Quantities Stay Degree: The variety of care episodes that included each a facility charge and an expert charge declined by 16 % between the 2 stories. This decline was largely pushed by a 22 % 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 share of claims billed as institutional versus skilled.
Connecticut
Since 2015, Connecticut has required hospitals and well being methods to report detailed outpatient facility charge information, together with whole outpatient facility charge costs, whole variety of visits with facility charges by payer, and costs 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 companies billed with E&M codes at off-campus services, apart from emergency division visits and sure remark stays, extending the prohibition to evaluation and administration (A&M) codes in October 2022 and on-campus services in July 2024. (Sure contracts had been grandfathered for a time frame.) The state additionally banned facility charges for telehealth companies.
In 2023, the state revealed stories with facility charge tendencies for off-campus HOPDs over a five-year interval and for on-campus HOPDs over a one-year interval. Additionally they publish displays with further info not included within the stories.
Key Findings from Business Market Information
- Facility Charge Income Elevated Considerably for Off- and On-Campus HOPDs: From 2019 to 2023, whole off-campus HOPD facility charge income rose 42 %, from $430 million to $611 million, and affected person visits involving facility charges elevated 12.8 %, from 1.22 million to 1.38 million. For on-campus HOPDs, from 2022 to 2023, whole facility charge income elevated 10.3 %, from $1.26 billion to $1.39 billion, and affected person visits with facility charges grew 5.4 %, from 1.68 million to 1.77 million.
- Increased Facility Charges per Go to for Business Insurers: On common, business insurance coverage paid 2.5 to three.5 instances extra in facility charges per go to at on- and off-campus HOPDs than some other payer, together with Medicare and Medicaid.
The stories and displays don’t embody common facility charge quantities by CPT codes, limiting the flexibility to match facility charge variations for particular person procedures throughout Medicare, Medicaid, and business insurers. Hospitals and hospital methods are required to report information yearly, and their filings are publicly accessible within the Notifications and Filings database.
Washington
Starting in 2012, Washington State required hospitals with provider-based clinics offering diagnostic and therapeutic companies to incorporate a separate type for outpatient facility charge information of their year-end monetary stories to the Division of Well being. Beneath this statute, hospitals should report—per provider-based clinic—the variety of affected person visits, outpatient facility charge income, and outpatient facility charge allowed quantities by payer sort. Nevertheless, the present reporting construction aggregates this info by hospital, stopping significant evaluation of knowledge on the particular person clinic stage. Consequently, it isn’t doable to hyperlink facility charges to particular companies 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 charge billing practices within the business sector throughout hospital methods. As an illustration, in 2024, one hospital system reported a most outpatient facility charge of greater than $6,900 for a single affected person go to, whereas others reported most costs of lower than $200.
For the foreseeable future, Washington will proceed to gather yearly outpatient facility charge stories from hospitals. Nevertheless, the Division of Well being will not be chargeable for analyzing the submitted information and lacks the authority to meaningfully implement compliance.
Trying Ahead
Regardless of variation in coverage design and information 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 information to determine patterns of extreme or inappropriate facility charge billing in hospital outpatient settings.
By quantifying the expansion and distribution of outpatient facility charges, state stories present a basis for insurance policies and market responses aimed toward curbing them. In Connecticut, sturdy information assortment effort enabled policymakers to determine and shut gaps of their regulation, together with narrowing the grandfathering provision and increasing the prohibition to A&M codes and on-campus services. In Maine, public reporting and elevated regulator consideration to outpatient facility charges helped immediate higher compliance with current legal guidelines over time. Some insurers and employer-purchasers may additionally use these findings to renegotiate contracts or alter community designs, whereas shoppers with clear info might probably keep away from services charging excessive facility charges. Nevertheless, the effectiveness of transparency alone in addressing extreme or inappropriate facility charge billing will rely upon native market dynamics, together with the relative energy of hospitals, insurers, and state businesses.
State information additionally present a launchpad for extra states to straight deal with affordability issues by way of substantive evidence-based facility charge reforms. By highlighting worth variations between care settings for companies that may be safely and appropriately delivered exterior of hospitals, these information may 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 companies to not more than the quantity paid to freestanding settings akin to doctor workplaces or ambulatory surgical facilities. A much less aggressive various is to prohibit outpatient facility charges for specified companies 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 could possibly nonetheless provide shoppers significant out-of-pocket protections. With both sort of reform, higher information would assist policymakers decide which settings and companies 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 provide worthwhile classes on how information 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 Undertaking HOPE – The Individuals-to-Individuals Well being Basis, Inc.