Hospital facility fees, according to those who oppose them, are hidden charges that often total thousands of dollars and are unfair to consumers who get hit with those costs months after their outpatient medical treatments.

Hospital facility fees, according to those who support them, are “people fees,” an integral part of paying for everything other than the doctor, such as nurses, X-ray technicians, laboratory technicians, reception, security, maintenance personnel, behavioral health personnel, social workers and much more.

A hearing last week in the House Health & Insurance Committee became a conflict between those who claim the fees are a form of surprise billing and those who say the bill is an attack on the workers for whom those fees pay for in an outpatient setting.

The committee substantially watered down a bill to ban facility fees, exempting dozens of rural hospitals and Denver Health from the bill’s impact, and turning the bill into a study rather than a blanket prohibition on all fees.

In a move that hasn’t been previously deployed this session, the committee limited the hearing to an hour each for opponents and proponents, a move designed to get lawmakers back to the House to debate gun violence prevention bills.

Josh Ewing of the Colorado Hospital Association said there is a fundamental misunderstanding of the fees, asking: “Why the hell are we doing this?”

Ewing said the federal government, through Medicare, which drives how private insurance works, dictates how these fees are billed. Doctors, who are often not employed by the clinics, are billed under one form. Other services are billed under a separate form that becomes facility fees.

“The idea that these fees are fungible or made up is insulting and frankly inaccurate,” Ewing said.

Rep. Chris degruy Kennedy, D-lakewood, responded in kind.

“You know why the hell we are doing this,” he said, claiming the bill is about abuses in billing. He also questioned Ewing on what happens when a hospital facility purchases a doctor’s practice, and slaps on

a facility fee with no benefit to the consumer.

Ewing disputed that there are abuses in the system, and said the bill would impose cuts without any data to back it up. He also apologized for his heated comments, saying the issue is very personal to him because his son recently suffered a brain injury and they’re still dealing with it.

The changes to House Bill 1215 were prompted by an outcry from Colorado hospitals and the Colorado Hospital Association, based on concerns that banning the fees would result in financial disaster for hospitals that are still struggling to recover from the impacts of the pandemic.

Consumers foot the bill for those fees when health insurers don’t cover them; that’s because of what’s negotiated in the insurance contract with the hospital. Some insurers cover all of it, some cover part of it and some don’t cover it at all.

HB 1215 is based on a model bill proposed by the National Academy for State Health Policy, which according to Influencewatch is a “left-of-center” organization funded by the liberal Arnold Ventures fund. So far, only Connecticut and New York have banned facility fees. In Connecticut, that ban applies only to telehealth.

Democratic Reps. Emily Sirota of Denver and Andrew Boesenecker of Fort Collins brought several amendments Friday, intending to tamp down the opposition from the Hospital Association.

But that didn’t work. In a statement, the association said it is “steadfastly opposed to the bill as introduced,” calling it misguided and based on misinformation, and it continues to oppose the bill, even with the amendments.

Any cap on fees would harm access to care, the association said. Every major hospital system is opposed to HB 1215.

In addition to turning the bill largely into a study, the amendments would ban facility fees for preventive care services, telehealth and primary care. The bill would retain its original language on transparency, requiring clinics to disclose those fees upfront.

The transparency piece appeared to be the only thing on which both sides agreed. The study is still up for debate as opponents said they hadn’t seen the amendments before Friday’s hearing.

The study would look at how some hospital systems use the fees, Sirota responded. The question is why a facility fee is being charged now when it hasn’t been in the past, Boesenecker added.

Rep. David Ortiz, D-centennial, is concerned what the bill would do to Craig Hospital. Ortiz first came to Colorado to be treated at Craig after he was paralyzed in a helicopter crash in Afghanistan. Craig is not exempt, Sirota said, but she pointed out that telehealth services offered by Craig would not be allowed to charge the fee.

Those who support the proposal pointed to large bills, sometimes totaling thousands of dollars, that they did not expect.

Michael Kark’s 6-year-old son has serious allergies, and with a recommendation from their allergist, took his son to an outpatient psychologist at Children’s. He thought the $20 copay would cover the visit, but later received a $503 bill.

The fees discourage people from seeking medical care, said Dr. Nicholas Nonas, a retired family physician from Greenwood Village. That’s a problem for patients with chronic and complex conditions that require a range of services, and the fees go way beyond what consumers pay for health insurance premiums and copays, he said.

Robert Smith, CEO of the Colorado Business Group on Health, said employers have reasons to be concerned about facility fees. Colorado’s fees are among the highest in the country, and twice that of independent outpatient facilities. Facility fees have little relation to hospital cost, and no relationship to quality, Smith said. Mostly, facility fees have a strong relationship to market share, he claimed.

The only alternative to the bill is to allow hospitals to charge what the market would bear, and that’s not good public policy, Smith added.

The Hospital Association and its allies showed up in force Friday, filling the room with opponents, many wearing “facility fees pay for me” shirts.

Former Lt. Gov. Donna Lynne, now the CEO of Denver Health, told the committee that facility fees do not meet the definition of surprise billing, and are required to be charged by the federal government.

Rural health care hospitals affiliated with the Western

Healthcare Alliance and a similar coalition on the Eastern Plains remain opposed to the bill, even as amended. The bill would prevent hospitals from being paid for nursing and other care, said Jennifer Riley, CEO of Memorial Regional in Craig.

Even though rural hospitals would be exempted, Riley said the carve out shows the bill’s poor design. Focus on the study, not banning the fees, even for telehealth, she said.

Degruy Kennedy asked whether facility fees for telehealth, for example, actually pay for those services, or whether some of that money covers other unrelated costs. One Democratic committee member later hinted those fees become part of large bonuses paid to hospital executives.

“We lost $32 million last year, largely on the cost of labor,” Lynne replied. “We’re also being asked to do more in the regulatory environment,” and she questioned whether that exemption in the amendment for Denver Health would last. Denver Health’s losses, and that of other hospitals, will continue, Lynne said.

Facility fees are a real cost of doing business, said John Riley, president of the faculty practice at the University of Colorado School of Medicine. He also warned that loss of revenue from the facility fees would shrink training programs and lead to fewer physicians who want to practice in Colorado. These fees have existed for decades, he pointed out, but the trend toward high-deductible health plans are largely why those fees are now showing up in consumer bills.

The proposal would have a trivial impact on hospital finances, said Loren Adler, a Brookings Institute fellow who was not testifying on the institute’s behalf. Hospitals will just charge higher professional fees or higher facility fees in other areas, he said, calling it a consumer protection issue and a form of surprise billing. Adler also drew outrage from some in attendance for comparing the fees that pay for medical personnel to baggage fees charged by airlines.

“It’s tough to hear, especially when you hear what nurses have done to get us through the pandemic,” said Danielle Schloffman, who works at Uchealth. “To be referred to as baggage is a little disheartening.”

Damian Mccabe, a social worker at Uchealth, called Adler’s comments offensive. These are “critical components” of health care, he told the committee.

Mccabe said that while he supports fee transparency, cutting them off for telehealth ignores the “massive infrastructure” that goes into telehealth care. It isn’t just the provider on the other side of the computer. “I’m not doing it from my kitchen,” he said.

The committee amended the bill on an 8-3 vote along party lines. It now moves to the House Appropriations Committee and a rewritten fiscal analysis that will report on the study’s cost.