Facility Fees: Paying More for the Same Healthcare

Texas families shouldn't have to pay more for the same healthcare simply because a private equity firm or hospital system bought their doctor's office.

The newly acquired practice may be treated as a hospital outpatient facility, allowing a separate “facility fee” to be added on top of the charge for the doctor’s services. So hospitals can bill formerly independent clinics or telehealth services as if they were a department of the main hospital, even if it’s remote. Patients often have no idea these fees exist until long after their appointment.

That's not necessarily more healthcare. Too often, it's a billing gimmick created by a change in ownership.

Texas 2036 documented one striking example: a routine diabetes visit for a Texas child that previously cost $90 jumped to nearly $600 after a change in ownership resulted in a new facility fee.

And the problem goes far beyond one family.  A primary care visit averages $116 in a physician's office compared with $217 in a hospital outpatient department, an 87% increase for the same service. An ultrasound averages $164 versus $339, while a biopsy averages $146 in a physician's office versus $791 in a hospital outpatient setting.

The problem is part of a larger trend of consolidation in healthcare as hospitals, private equity firms and large health systems continue to acquire independent physician practices. Research has found that consolidation drives prices higher while often failing to produce corresponding improvements in quality.

Texans shouldn't be forced to pay dramatically more simply because the name on the ownership paperwork changed.

The Texas Legislature should act.

Twenty-one states have enacted facility fee laws, including advance patient notification and limits on fees for certain off-campus outpatient services. At minimum, lawmakers should require upfront disclosure of facility fees and prohibit them for routine services at off-campus physician offices.
They should also ensure billing reflects where care was delivered and scrutinize consolidation that lets Big Medicine charge more without adding patient value.

Texas lawmakers considered facility fee legislation last session, including proposals for providing consumers advance notice of the fees and accurate reporting of where care was provided.

They should come back in 2027 prepared to finish the job.

If the doctor is the same, the office is the same and the care is the same, the bill shouldn't suddenly be higher. Texas lawmakers should protect patients and put an end to facility-fee gamesmanship.