On March 6, 2026, New Mexico enacted HB306, the “Fair Pricing for Routine Medical Care Act”, to prohibit charging of healthcare facility fees for certain services, to require the disclosure of facility fees to patients, and to require the reporting of facility fees to the all-payer claims database. The bill prohibits hospitals and clinics from charging outpatient facility fees, which many hospital systems add to bills for healthcare services at facilities they own. The bill imposes special requirements for uninsured patients, as well as for rural clinics and emergency departments that rely heavily on facility fees due to high acuity and low profit margins. The bill also imposes transparency and reporting requirements intended to provide patients with price transparency and improve patient understanding. While hospital systems claim facility fees are necessary to cover hospital overhead and administrative costs, others note that the fees unnecessarily increase the cost of receiving healthcare without improving services. Facility fees are more prevalent in heavily consolidated healthcare systems, and at higher rates.
New Mexico HB 306
House Bill 306, sponsored by House Majority Leader Reena Szczepanski and State Sen. Elizabeth “Liz” Stefanics, was introduced on February 4, 2026. It passed the House and the Senate with unanimous support and was signed a month later on March 6. Both the lack of opposition and the speed at which the bill moved are noteworthy and indicate a strong interest in addressing the issue.
The bill prohibits healthcare facilities from charging facility fees for routine outpatient services provided to patients, including preventive care, vaccinations, and telehealth. Facility fees could still be charged for inpatient care, emergency departments, or freestanding emergency facilities.
HB306 also imposes transparency requirements on hospitals and clinics, requiring them to post signage near check-in points that notifies patients about potential facility fees, insurance coverage or lack thereof, protections under the Fair Pricing for Routine Medical Care Act, and prohibits charging patients fees to cancel or reschedule appointments due to unexpected facility fees.
There are exceptions for rural providers (who may still charge facility fees), and the bill creates a blanket prohibition on health systems charging facility fees to patients without health insurance. The act requires itemized billing standards and reporting of detailed information on these fees to the All-Payer Claims database.
Facility Fees – Increasingly Controversial
The bill describes facility fees as extra charges by healthcare establishments intended to cover operational costs, separate from the professional fees charged by hospitals for medical services. More broadly, facility fees are additional charges levied by establishments intended to cover overhead costs, such as equipment, building maintenance, and administrative staff. But increasingly, as hospital systems buy out independent clinics, facility fees are being charged even when those clinics don’t incur hospital-specific costs.
As hospitals have expanded their ambulatory services and acquired smaller independent practices, healthcare competition has reduced, driving up costs for outpatient care, including higher facility fees. The Health Care Cost Institute reported that procedures at hospital-owned physician practices can cost up to three times as much as at physician-owned practices. On top of that, facility fees have added an average of $100 to the cost of each primary care visit for patients, regardless of whether they were admitted to the hospital or used its facilities. The median lab test price was over three times higher in an outpatient department than in an independent lab or a physician's office.
These costs are passed on to patients, contributing to high care costs and the growing public perception that provider prices are too high. This dissuades patients from seeking preventive care, reduces follow-through on recommended screenings, and worsens affordability and trust.
Governments are looking to address this issue by regulating healthcare pricing through site-neutral regulations and by responding to healthcare market consolidation by curbing a major incentive for large systems to continue buying up independent clinics.
New Mexico’s Exceptions to the Rule
New Mexico is looking to address harms from facility fees with HB306 by banning charging facility fees for "preventive health care services provided in an outpatient setting, … vaccination services provided in an outpatient setting” and “telehealth services”. However, the new law explicitly does not prohibit “a hospital or health system from charging a facility fee for … health care services provided in an inpatient setting … health care services provided at a hospital emergency department” and “health care services provided at a freestanding emergency department”. The bill adds that the prohibition does not prevent “a hospital or health system from charging, billing, or collecting a facility fee from a patient's insurer pursuant to an agreement between the hospital or health system and the insurer or as required by law.”
The state's Fiscal Impact Report for the bill (which included input from New Mexico's Health Care Authority and the Office of the Superintendent of Insurance) found these exceptions permissible, since the state is concerned with targeting facility fees that would deter patients from seeking preventive care rather than general facility fees. The bill intends to remove financial barriers to early detection and prevention. When facility fees are charged for preventative services that are intended to be no or low cost, they impose financial burdens that discourage patients from seeking preventive care, reduce follow-through on recommended screenings, and worsen affordability and trust in routine health care.
Attempting to Protect Rural Hospitals and Uninsured Patients
The bill also exempts hospitals and clinics in rural areas from the facility fee prohibition. “Rural” is defined in the law as “a rural county or an unincorporated area of a partially rural county, as designated by the health resources and services administration of the United States department of health and human services”. Chartis (a health analytics and consulting firm) recently reported a 43% increase in the number of rural hospitals running an annual deficit, with escalating costs, workforce shortages, and growing administrative burdens being driving factors. Financial hardship has forced many rural facilities to join larger health systems to survive. Since consolidation and acquisition is a lesser concern in rural areas where competition is already scarce, ensuring these hospitals are able to stay open and support patients is the primary concern for state lawmakers. Facility fees can help these hospitals and clinics cover their overhead and may be necessary to continue operating.
Additionally, the bill prohibits facility fee charges to uninsured patients for any service. 2024 data indicated 10.1% of New Mexicans are uninsured, showing that New Mexico has one of the highest uninsured rates in the country. The bill appears to show a sensitivity to the large number of state residents who have to shoulder their own healthcare financial burdens and prohibits fees for residents who would have to address that cost without insurance coverage.
New Transparency Requirements (Including the APCD)
The act introduces significant new transparency requirements, including requiring facilities to post visible signage near check-in points notifying patients about potential facility fees and whether they will be covered by insurance at the time of appointment scheduling and again when services are rendered.
The act also requires standardized, clear billing that specifically identifies facility fees, and exempts patients from cancellation fees if they decline or reschedule appointments due to high or uncovered facility fees.
Finally, the act imposes reporting requirements for hospitals and health systems charging facility fees to report detailed data on these fees to the all-payer claims database, including:
- Number of times fees were charged
- Total dollar amount charged to patients
- 25 most common billing codes and total amount charged under each code
- 25 billing codes with the highest average cost and total amount charged under each code
In the bill’s Fiscal Impact Report, the state reported that these transparency and reporting requirements were intended to improve patient understanding and awareness of facility fees and provide a clear pathway for questions and disputes.
Reactions to the New Law
Proponents of the bill, and the Fiscal Impact Report, argued that it offers patients greater transparency, protection from costly fees that inhibit routine care, and enhanced access to preventive care, thereby improving health outcomes. Secretary of the New Mexico Health Care Authority, Kari Armijo, stated that, “HB 306 brings more clarity to what patients pay while maintaining strong hospital systems and protecting access in rural communities.” One of the bill's sponsors, Sen. Liz Stefanics, added that the bill encouraged "fairness and trust in health care billing" by implementing patient-pricing protections that deter unexpected add-on charges. House Majority Leader Reena Szczepanski advocated for the bill, stating, “[HB306] eliminates costly fees from patients’ bills and helps make routine care pricing more predictable and understandable for New Mexico families.”
While the bill passed unanimously in New Mexico, hospital advocates, including the American Hospital Association, have opposed government attempts to limit facility fees.
The American Hospital Association has claimed that facility fee prohibitions would cut between 3 and 180 billion dollars from hospitals' budgets without offering alternative mechanisms for funding. AHA argues that these fees and funds are necessary to maintain 24/7, high-acuity care in settings such as emergency and trauma care and reflect the true cost of these services throughout the health system. AHA claims that hospital outpatient departments and affiliated offices must meet higher regulatory standards, also contributing to the necessity of facility fees. AHA argues that imposing fee regulations could deter hospitals from providing outpatient services and, consequently, lead to the closure of these departments, impacting access to care in communities.
The Health Cost Institute reported that most legislation has been targeted at reducing facility fees where patients were not admitted and received care outside a hospital. In these instances, they claim patients are being charged disproportionately for costs their care did not contribute to.
Conclusion
As of 2025, 20 states have enacted some sort of legislation to regulate facility fees. Connecticut, Indiana, and Maine have been among the state leaders on this issue. Currently, at least eleven states are considering bills to address facility fees and site-neutral billing. The rise of hospital consolidation and the buying out of small clinics, along with frequent bipartisan support for addressing the issue, may indicate growing interest in the topic. The federal government has started to address the issue in the context of Medicare (requiring Medicare to make site-neutral payments, i.e., the same price for the same service regardless of location, for outpatient services), and is considering proposals to do more.
Federal policy options could include further transparency and reporting requirements that would allow analysts and regulators to collect data and review claims, and insurers to negotiate with providers over the total cost of care. Another federal option could include prohibiting facility fees for certain types of services or settings, similar to the New Mexico law.
The growing momentum regarding facility fees and emerging federal proposals suggests that facility fee reform is an increasingly central topic in the ongoing effort to make healthcare more transparent, equitable, and affordable.
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