Michigan is one of the latest states to consider legislation that would restrict facility fees from health care entities, including ambulatory surgery centers (ASCs).
It’s a trend that began to surface in 2023, according to the Ambulatory Surgery Center Association (ASCA). And there’s little to suggest it’s a trend that will slow down in the near future.
Michigan HB 5770, introduced last month by state Reps. Curtis VanderWall and Reggie Miller, would prohibit health care providers from charging facility fees for professional medical services provided outside a hospital setting, beginning Jan. 1, 2027. ASCA flagged the development April 10.
The bill loosely defines a facility fee as any charge that is billed by a health care provider to cover operational expenses, with that fee being separate from a professional fee.
“If enacted, the bill would be catastrophic for ASCs in Michigan,” ASCA’s Stephen Abresch wrote. “Facility fees in ASCs are the facility’s reimbursement for services provided there and account for all other costs of a patient’s care besides the professional fee paid to the physician for their services.”
The legislation is part of a broader wave of state-level facility fee restrictions that gained traction in the early 2020s, ASCA noted, driven largely by concerns over hospital consolidation and off-campus billing practices. The original target was hospitals purchasing physician offices and then billing at hospital rates – a practice critics argue inflates costs without improving care.
ASCs, however, keep getting caught in the crossfire.
Since Texas introduced HB 1692 during its 2023 legislative session, ASCA has tracked similar proposals in California, Colorado, Connecticut, Illinois, Maine, Massachusetts, New York, North Carolina, Ohio, Oregon, Rhode Island and Washington. In each case, the association says, advocacy organizations and lawmakers were largely unaware that ASCs would be affected – or, in some cases, that ASCs existed at all.
“Thanks to the advocacy work of state ASC associations and ASCA, these proposals have either failed to be enacted or had provisions impacting ASCs removed prior to enactment,” Abresch emphasized.
In terms of other facility-fee-related developments for 2026, it appears New Mexico has also backed such legislation. In February, state lawmakers voted to pass HB 306, which would prohibit hospitals and health systems from charging facility fees beginning Jan. 1, 2027.
“New Mexicans shouldn’t face surprise charges for routine care,” Kari Armijo, secretary of the New Mexico Health Care Authority, said in a statement. “HB 306 brings more clarity to what patients pay while maintaining strong hospital systems and protecting access in rural communities.
ASCA and Abresch are currently tracking six active bills across five states — Illinois, Massachusetts, Michigan, New York and Rhode Island — that currently contain language that would have some impact on ASCs’ ability to charge a facility fee if enacted, an association spokesperson told ASC News in an email. At least two of those bills — in Illinois and Rhode Island — were introduced in 2026.
Among its provisions, IL HB 4701 restricts health care providers from charging a facility fee except for services provided on a hospital’s campus, services provided at a facility that includes a licensed hospital emergency department, or emergency services provided at a freestanding emergency center.
Meanwhile, RI HB 7937 prohibits a health care facility (defined to include ASCs), hospital-based facility, health care provider or health system from billing, charging, collecting or seeking compensation, remuneration or reimbursement for a facility fee for services provided off-site from a hospital campus. On April 9, the bill was recommended for further study, which typically indicates its dead for that legislative session.
