Texas Hospitals Sound Alarm on Legislation That Would Dismantle Outpatient Hospital Care


AUSTIN, Texas (March 29, 2023) – A new bill gaining traction at the Texas Capitol would have devastating impacts on access to health care and health care affordability.


Carrie Williams
Chief Communications Officer
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House Bill 1692 – set for a Texas House committee hearing on Thursday – would prohibit “facility fee” payments for health care services provided off a hospital campus. The Texas Hospital Association calls the legislation “unprecedented and dangerous,” as it will shutter outpatient clinics and dismantle access to care.

Read THA’s white paper on the issue, Texas: Don’t Dismantle Outpatient Hospital Care.

The facility fee is the hospital’s payment for outpatient services. Hospital payments cover a patient’s care and environment beyond the doctor’s bill – a critical part of a patient’s overall care. They cover the cost of nurses, lab technicians, interpreters, medical records, security personnel, janitorial staff and others – the people, equipment and technology involved in a patient’s care beyond the doctor.

Without hospital payments, outpatient services – like biopsies, X-rays and lab work – are at risk of going away. These payments keep outpatient clinics open and available to Texans as a lower-cost, convenient option for health care.

Nearly 70% of Texas hospitals indicate they will close outpatient clinics if they cannot collect payment for their overhead and staff, according to a recent survey of Texas Hospital Association membership. Additionally, 85% would reduce staff and 80% would reduce services.

The legislation would also prohibit hospital payments for a list of services that a state agency – not a patient or a physician – determines should be performed at a lower-level care setting. Allowing a state agency to uniformly determine where all patients should receive certain procedures undermines the practice of medicine and disregards the individual circumstances of each patient, such as whether they have underlying health conditions or are at a greater risk for complications.

“Hospitals have worked over the years to shift care to outpatient settings so patients have lower-cost, convenient options,” said THA President/CEO John Hawkins. “Outlawing these payments kills that progress and threatens the future of outpatient clinics across the state.”

Many hospitals operate outpatient services as points of access to specialty services for lower-income individuals, underserved populations, seniors and people in rural communities.

“We can’t underscore enough how devastating this would be for patients trying to get care, particularly lower-income and rural patients who rely on outpatient care,” Hawkins said.

Hospital outpatient payments not only help give communities access to care but also help hospitals build, maintain and improve specialized services like cancer care, diabetes care, cardiology and maternal health.

As the pandemic begins to subside, Texas hospitals continue to struggle with skyrocketing expenses and losses, plus an unprecedented labor shortage. For 2022, nearly half of all Texas hospitals had negative operating margins, and nearly one out of every 10 hospitals was at risk of closure. Read more about the pandemic’s impact on Texas hospitals here.

About THA
Founded in 1930, the Texas Hospital Association is the leadership organization and principal advocate for the state’s hospitals and health care systems. Based in Austin, THA enhances its members’ abilities to improve accessibility, quality and cost-effectiveness of health care for all Texans. One of the largest hospital associations in the country, THA represents 452 of the state’s non-federal general and specialty hospitals and health care systems, which employ some 400,000 health care professionals statewide. Learn more about THA at www.tha.org or follow THA on Twitter at http://twitter.com/texashospitals.