By Bill Prentice
Michigan recently introduced a bill that would prohibit healthcare providers, including ambulatory surgery centers (ASC), from charging facility fees beginning January 1, 2027. HB 5770 would disallow providers to charge facility fees for professional medical services provided through telemedicine; professional medical services provided in a facility that is not a hospital; and professional medical services provided to a patient who is receiving outpatient service in a hospital, unless that service is provided in an emergency room or is observation. Enactment of this legislation would be the death knell to ASCs in the state and drive care back into the much more expensive hospital setting.
Facility fees are essential to running an ASC. While “professional fees” reimburse physicians and surgeons, facility fees reimburse the costs of supplies, medicines and services of other clinicians, e.g., nurses and physician assistants. Facility fees account for all costs of a patient’s care beyond the professional fee. If a bill like HB 5770 is enacted by a state, all surgery centers in that state would be unable to secure reimbursement for any portion of the cost of care beyond the professional fee and would have to shut down.
Michigan’s bill is not an anomaly. The past few years, health policy organizations and advocacy groups have targeted facility fees and advocated for site-of-service restrictions to cut healthcare costs. These organizations, such as Arnold Ventures, America’s Health Insurance Plans (AHIP), Families USA and United States of Care, have alleged that facility fees are made-up charges. They have used reports of hospitals charging facility fees at recently purchased off-campus locations, like physician offices, to strengthen their narrative. They also have routinely pitched proposals to their state and federal lawmakers identifying hospital practices as the reason governments need to restrict the charging of facility fees based on where medical services are received. And while surgery centers are not the focus of their efforts, the broadly written bills include ASCs in the restrictions.
Recently, Colorado, Connecticut, Maine, North Carolina and Texas introduced legislation that would have prohibited healthcare providers, including ASCs, from charging facility fees for services provided outside of a hospital’s main campus. The Texas Ambulatory Surgery Center Society (TASCS) stopped the proposal in Texas, while the Colorado Ambulatory Surgery Center Association and the Connecticut Association of Ambulatory Surgery Centers convinced legislators to narrow the scope of their proposals to protect ASCs from the restrictions. The legislation in Maine was amended to create a task force to evaluate the impact of facility fees and then enacted by the governor, while the legislation in North Carolina died at the end of the 2023-2024 state legislative session.
Despite TASCS’s extensive lobbying, Texas introduced another bill in 2025 containing similar provisions to its last bill from 2023. In addition, California, Connecticut, Illinois, Massachusetts, New York, Ohio, Oregon, Rhode Island and Washington also introduced measures last year restricting facility fees. Thanks to the efforts of state ASC associations and ASCA, no legislation with facility fee restrictions impacting ASCs has been enacted.
These proposals have made clear that both advocacy organizations and lawmakers are unaware of the ASC model, facility fees, the scope of the proposed restrictions and how pricing works in healthcare. State ASC associations and ASCA are working together to educate lawmakers about ASCs and have succeeded in pushing back against some of the proposals.
Without facility reimbursements, ASCs cannot pay for any of the services and supplies needed to perform surgery and would be forced out of business. The loss of all ASCs in a state would blow a huge hole in the state’s outpatient surgical capacity, resulting in longer wait times for necessary procedures and higher costs for patients and insurers, as hospitals and hospital outpatient departments would essentially become the only site of service for outpatient surgical care.
More work needs to be done to educate lawmakers about facility fees and the role that surgery centers play in healthcare. Protecting ASCs from restrictions on facility fees is one of ASCA’s top priorities. You can make a difference, too, by hosting your lawmaker at your facility during National ASC Month or any other time of the year, and by attending ASCA’s National Advocacy Day. During that event, ASCA schedules a full day of congressional meetings on Capitol Hill for each participant and provides a training briefing for all attendees to explain crucial ASC priorities and how to conduct a successful congressional meeting. Write mkunkel@ascassociation.org with any questions or for more information on how to get involved.
