Hospital Finances Following Connecticut’s Ban on Outpatient Facility Fees

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.