Hospital finances following Connecticut's ban on outpatient facility fees.

Overview

INTRODUCTION: In 2017, Connecticut prohibited hospitals from billing "facility fees" for certain services delivered off their main campuses. METHODS: Using Hospital Medicare Cost Reports and the National Academy for State Health Policy Hospital Cost Data (2011-2022), we applied a difference-in-differences model within an event study framework to compare hospital financial outcomes between Connecticut hospitals and matched control hospitals nationwide. RESULTS: Unadjusted trends suggest small declines in operating margins and outpatient-to-total charges after the ban, alongside an increase in inpatient-to-total charges. In adjusted analyses, operating margins and inpatient-to-total charges did not change significantly, while outpatient-to-total charges declined significantly by 6.91%. CONCLUSION: Given the small sample and limited precision, a policy effect cannot be ruled out for several outcomes. Future research evaluating the long-term sustainability and impacts on hospital financials, access, and care quality are warranted.