North Carolina Senate advances bill to limit hospital facility fees for Medicaid patients
State senators advance legislation restricting when hospitals can charge extra facility fees to Medicaid patients for outpatient care.
RALEIGH, NORTH CAROLINA — The North Carolina Senate Health Care Committee approved legislation Thursday to restrict hospitals from charging additional facility fees to Medicaid patients for certain outpatient services.
House Bill 727 addresses a practice where hospitals add extra charges, known as facility fees, to Medicaid bills when patients receive treatment at locations outside traditional hospital settings. The bill is part of lawmakers’ efforts to control rising Medicaid costs across the state.
New Restrictions on Hospital Billing
Under the proposed legislation, hospitals would only be permitted to charge facility fees for Medicaid patients treated in specific locations: main hospital buildings, nearby hospital structures, buildings equipped with emergency departments, or ambulatory surgical centers.
Senator Jim Burgin, a Republican from Harnett County, explained that hospitals have been adding these fees to outpatient office visit bills for years. “This is a step toward trying to address fees, and especially facility fees, that are charged at facilities that have either been purchased or that are away from campus,” Burgin told committee members this week.
Part of Broader Cost-Control Efforts
The current proposal is a scaled-back version of more comprehensive healthcare cost reduction measures. The Senate previously passed a broader bill last year aimed at reducing healthcare costs, which included curbing facility fees for other types of insurance beyond Medicaid. However, the state House did not take up that more expansive legislation.
This year’s approach focuses specifically on Medicaid patients, reflecting legislators’ commitment to addressing what they view as excessive billing practices that burden the state’s healthcare program for low-income residents.
Hospital Industry Pushback
The hospital industry has voiced opposition to proposed facility fee limitations. Josh Dobson, CEO of the North Carolina Healthcare Association, which represents hospitals statewide, argued to legislators in March that facility fees serve important operational purposes.
According to Dobson’s testimony, these fees help cover essential expenses including medical staff salaries, equipment purchases, and supplies needed for hospitals and hospital-owned clinics to function effectively.
The debate highlights ongoing tension between lawmakers seeking to control healthcare costs and hospital administrators who maintain that current billing practices support necessary infrastructure and services.
The bill now moves forward in the legislative process as part of a series of measures legislators have promised to consider this year in their efforts to manage Medicaid expenditures. The timing and scope of any final vote on the measure remains unclear as the legislation continues through the Senate.
