Hospital finances following Connecticut's ban on outpatient facility fees

In 2017, Connecticut prohibited hospitals from billing "facility fees" for certain services delivered off their main campuses.

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.

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%.

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.