Texas hospitals sound alarm on bill that would eradicate facility fees

The Texas Hospital Association is on high alert due to a new bill gaining traction at the Texas Capitol that would have "devastating impacts" on access to care and healthcare affordability, the group said in a March 29 news release shared with Becker's.

The bill, set for a Texas House committee hearing on March 30, would outlaw "facility fee" payments for healthcare services provided off a hospital campus — an "unprecedented and dangerous" move that would shutter outpatient clinics and dismantle access to care, according to the state hospital association. The bill would also prohibit hospital payments for services that a state agency determines should be performed at a lower-level care setting. 

Patients may be charged facility fees when they see a physician at a clinic that they do not own, with these fees often charged at hospital-owned clinics to cover the people, equipment and technology costs involved in a patient's care beyond the physician. 

Patient and consumer advocates have criticized hospital facility fees, which can add thousands of dollars to a patient's bill, but hospitals argue they are necessary to cover the high cost of keeping a hospital open and able to provide care 24/7.

Without facility fee payments, hospitals argue that outpatient services such as biopsies, X-rays and lab work are at risk of going away.

Almost 70 percent of Texas hospitals indicate they will close outpatient clinics if they cannot collect payment for their overhead and staff, according to a recent survey from the Texas Hospital Association. Additionally, 85 percent would reduce staff and 80 percent would reduce services.

"Hospitals have worked over the years to shift care to outpatient settings so patients have lower-cost, convenient options. Outlawing these payments kills that progress and threatens the future of outpatient clinics across the state," THA President and CEO John Hawkins said in the release. "We can't underscore enough how devastating this would be for patients trying to get care, particularly lower-income and rural patients who rely on outpatient care."

Texas hospitals continue to battle rising expenses and losses and an ongoing labor shortage. For 2022, almost half of all Texas hospitals had negative operating margins, and nearly one out of every 10 hospitals was at risk of closure, according to the THA.

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