Digital Debut

State Legislatures Kick Off 2024 with Continued Focus on Healthcare

Facility fees, prior authorization and price transparency see sustained interest

BY STEPHEN ABRESCH | JANUARY 26, 2024

This year’s state legislative sessions are well underway, with 39 state legislatures actively meeting as of January 17. For many states, this year represents the second year of their sessions, which often features fewer new bill introductions. Certain states, like Arkansas, Washington and Wyoming, hold shorter sessions focused on budgetary or fiscal concerns. Despite the typically slower pace of the second year in a legislative biennium, legislators around the country have quickly indicated that healthcare issues remain a top concern that they intend to pursue in 2024.

Facility Fees

The most unfortunate trend in healthcare policy in 2023 has already reared its ugly head this year. Supporters of facility fee restrictions say the measures will prevent hospitals from charging facility fees at off-campus locations, but as written, they impact ASC facility fees as well. Despite holding a short session in 2024, legislators in Washington State have introduced HB 2378, a bill that would prohibit facility fees for services provided outside of a hospital’s main campus.

In addition to the new introductions, some states still have unfinished business from 2023. In Maine, the Task Force to Evaluate the Impact of Facility Fees on Patients is nearing the release of its final recommendations to the state legislature for action on the issue this year. And legislation on the topic in Massachusetts and North Carolina remains active from last year.

Six states—Colorado, Connecticut, Maine, Massachusetts, North Carolina and Texas—considered facility fee restrictions last year as national organizations cheered them on. Organizations like the National Academy for State Health Policy (NASHP), Arnold Ventures, Families USA and United States of Care have steadily promoted the flawed proposals as an easy way for states to address cost growth in healthcare. These bills would effectively end the existence of ASCs in a state, blowing a gaping hole in its outpatient surgical capacity and leaving patients no other option but higher-cost settings.

Curiously, Arnold Ventures, one of the organizations advocating for these poorly written facility fee restrictions, provided funding for a study on facility fees last year. The study revealed that hospital facility fees for colonoscopies are substantially higher than those charged by ASCs for the same procedures, calling attention to the conflict between Arnold’s support for facility fee restrictions on the one hand and its advocacy for lowering the cost of care on the other.

Prior Authorization

As insurers have made greater use of prior authorization and utilization review, providers have sought more help from state policymakers. A number of states pursued prior authorization reforms last year. Arkansas created a “gold carding” program in which providers that received approval for 90 percent of their prior authorization requests over the past year were granted an exemption from prior authorization requirements. Washington State created time frames for insurers to make decisions on prior authorization requests.

This year, legislators in Indiana, Kentucky and Missouri have introduced gold carding requirements, while Oklahoma and Wyoming are considering the American Medical Association’s model legislation, Ensuring Transparency in Prior Authorization Act, which includes gold carding requirements along with prescribed approval time frames and prohibitions on retroactive denials of preauthorized care. In the final acts of its 2022-2023 legislative session, New Jersey enacted the model legislation as AB 1255 on January 16, 2024. Legislators in Vermont have introduced a measure that would prescribe time frames in which insurers must make a decision on a prior authorization request, and companion bills, HB 1134 and SB 98, in Virginia would prohibit retroactive rejections of approved prior authorization requests after services or supplies have been provided to a patient.

Price Transparency

Price transparency has been on state legislators’ minds for years, and since 2022, ASCs have received greater and greater scrutiny. Last year, nine states—Colorado, Florida, Illinois, Iowa, Massachusetts, Minnesota, New Jersey, North Carolina and Texas—considered price transparency legislation for ASCs, with Colorado enacting price estimate requirements and Texas enacting itemized billing requirements.

Legislators in Florida, which has an existing written estimate requirement in statute, have signaled since last year that they intend to revisit price transparency requirements in 2024. The promise to take steps to address the issue arrived in the form of SB 1640, which essentially takes the federal government’s own hospital price transparency requirements and applies them to facilities they were never designed for. If enacted, Florida will join Indiana and Virginia in implementing some of the least thoughtful price transparency requirements for nonhospital facilities.

Lawmakers in South Carolina are taking a cue from Texas and pursuing their own itemized billing requirements this year. The measure, HB 4622, is a close match for Texas’ SB 490, which ASCs in the state have had to comply with since September 1, 2023. New Jersey has refiled a measure requiring healthcare providers to furnish written estimates to out-of-network patients for consideration during the state’s 2024-2025 legislative session, while Virginia has refiled a piece of legislation to give individuals a private right of action (i.e., the right to sue) against healthcare providers that do not meet the state’s price transparency requirements.

As state legislators discuss these and other proposals impacting ASCs, ASCA will continue to monitor and report on the developments in state houses across the country to its members. If you have any questions or are interested in learning how you can become more involved in advocacy efforts at the state and federal levels, write Stephen Abresch at sabresch@ascassociation.org.