BILL ANALYSIS

Senate Research Center	S.B. 1275
88R9440 SRA-F	By: Hancock
	Health & Human Services
	4/3/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

There have been recent reports of patients going to a nearby healthcare facility for nonemergency care then being charged a surprise fee by the facility. These fees are commonly called facility fees and are typically added by hospitals to their charge for healthcare services to account for the higher costs of operating a hospital, such as being open 24/7 and paying for expensive medical technology.

While adding a facility fee to a bill may be appropriate for services that must be provided in a hospital setting, it does not makes sense to allow these extra fees to be charged to a customer when the service was not provided in a hospital or could have been provided outside of a hospital. This common practice is needlessly causing patients to incur huge, unexpected costs.

S.B. 1275 prohibits healthcare providers from charging "hospital facility fees" for services not performed at a hospital. The bill also prohibits charging a facility fee for any service that can be safely and effectively provided outside of a hospital setting, as decided annually by the executive commissioner of the Health and Human Services Commission. Prohibiting the charging of improper facility fees will decrease costs for patients and discourage financial arbitrage in a time where consumers have fewer choices for healthcare.

As proposed, S.B. 1275 amends current law relating to facility fees charged by certain health care providers and provides an administrative penalty.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the executive commissioner of the Health and Human Services Commission in SECTION 1 (Sections 328.002 and 328.006, Health and Safety Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle G, Title 4, Health and Safety Code, by adding Chapter 328, as follows:

CHAPTER 328. PROHIBITED FACILITY FEES BY CERTAIN HEALTH CARE PROVIDERS

Sec. 328.001. DEFINITIONS. Defines "department," "executive commissioner," "facility fee," "freestanding emergency medical care facility," "health care provider," "hospital," "hospital-based facility," and "hospital campus."

Sec. 328.002. PROHIBITED FACILITY FEES. (a) Prohibits a health care provider, except as provided by Subsection (b), from charging a facility fee, including a facility fee for:

(1) outpatient health care services; or

(2) health care services identified by the executive commissioner of the Health and Human Services Commission (executive commissioner) under Subsection (c).

(b)� Provides that Subsection (a) does not apply to:

(1) services provided on a hospital campus, except for services described by Subsections (a)(1) and (2); or

(2) services provided at a freestanding emergency medical care facility, except for services described by Subsection (a)(2).

(c) Requires the executive commissioner by rule to identify annually health care services that may be safely and effectively provided outside of a hospital setting. Prohibits a facility fee from being billed or collected for services identified under this subsection.

(d) Prohibits this section from being construed to expand the type of health care services that a freestanding emergency medical care facility is authorized to provide.

Sec. 328.003. REPORTING. Requires each health care provider to submit a report to the Department of State Health Services (DSHS), in the form and manner prescribed by DSHS, detailing any facility fees charged by the provider. Requires that a report submitted under this section comply with the requirements of Chapter 108 (Health Care Data Collection).

Sec. 328.004. AUDIT. (a) Authorizes DSHS or its designee to audit a health care provider for compliance with this chapter.

(b) Requires each health care provider to make available, on written request of DSHS or its designee, copies of any books, documents, records, or other data that are necessary to complete the audit.

(c) Requires each health care provider to retain copies of information described by Subsection (b) until four years after the date the health care services were provided.

Sec. 328.005.� ENFORCEMENT.� (a) Requires DSHS to assess an administrative penalty in an amount not to exceed $1,000 against a health care provider that violates this chapter or a rule adopted under this chapter.

(b)� Provides that this section does not create a private cause of action against a provider for legal or equitable relief.

Sec. 328.006.  RULES. Authorizes the executive commissioner to adopt rules to implement this chapter.

SECTION 2. Effective date: upon passage or September 1, 2023.