Some analyses have found that commercial insurers pay more when care is delivered in hospital outpatient settings than in physicians’ offices for the same service. Facility fees, combined with hospital market power, are a key driver of this price difference.
In response, some states—including Colorado, Maine, Connecticut, and Washington—have collected and analyzed data on outpatient facility fee billing within their borders. This growing interest reflects several converging trends. Hospital outpatient utilization has increased substantially over the past few decades, and care delivered in HOPDs has generally become more expensive compared to similar care provided in non-hospital settings. Provider consolidation has widened these price gaps by increasing hospitals’ negotiating power in commercial markets through physician practice acquisitions. At the same time, growth in health plan deductibles (in amount and prevalence) over the past decade and changes to other aspects of insurance plan benefit designs have increased the visibility of facility fees’ financial impact to patients and policymakers alike.