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May 12, 2023

HHC’s acquisition of 2 surgical centers approved, with a condition – it can’t charge ‘facility fees’

PHOTO | COSTAR Hartford HealthCare is taking a majority ownership stake in the Litchfield Hills Surgery Center in Torrington.

The Office of Health Strategy (OHS) recently approved two settlement agreements allowing Hartford HealthCare to acquire two outpatient surgical centers in Trumbull and Torrington.

The OHS added several stipulations to the agreements, including prohibiting the acquired entities from charging “facility fees,” which hospitals typically charge in addition to the cost of professional services at surgical centers away from their main campuses.

In both applications, HHC sought a Certificate of Need (CON) for the transfer of ownership of the existing facilities.

The settlement agreements between HHC and the OHS were reached after a public hearing process.

Dr. Deidre Gifford, executive director of the state Office of Health Strategy, told the Hartford Business Journal that when her agency considers CON applications, it evaluates whether the proposals have the potential to increase healthcare costs for consumers.

“… The facility fee stipulation included in the two agreed settlements (is) to ensure that no unnecessary facility fees are assessed to surgical patients receiving care at the ambulatory surgery center,” Gifford said. “Settlement terms are agreed to by both parties and represent mutually agreed upon terms for approval of a CON application.”

The stipulation is in line with Gov. Ned Lamont’s healthcare reform bill currently being considered by lawmakers, which specifically targets facility fees.

Gifford has told legislators that the fees drive up insurance premiums and out-of-pocket costs without improving outcomes or quality, according to the CT Mirror.

In one agreement, HHC acquired 70.59% of the membership interests in the Surgery Center of Fairfield County, an outpatient surgical center at 112 Quarry Road in Trumbull. The facility provides services for pain management, ears, nose and throat, general surgery, gastroenterology, gynecology, ophthalmology, oral surgery, orthopedics, plastic surgery, podiatry and urology.

The surgical center was previously owned by SCA-Connecticut Partners, a for-profit ambulatory surgery center management company based in Birmingham, Alabama.

The settlement specifically prohibits the newly owned Surgery Center of Fairfield County from charging hospital facility fees, though it may employ a price structure similar to other licensed outpatient surgical centers, including imposing professional charges as well as charges for technical fees associated with performing surgery.

In a similar agreement, HHC acquired 51% of the membership interests in the Litchfield Hills Surgery Center, a for-profit physician-owned outpatient surgical center at 245 Alvord Park Road, Suite B3, in Torrington. HHC plans a $2.75 million capital expenditure, according to the agreement.

In a statement, HHC said it is focused on transforming health care.

"Increasingly, this means providing the highest quality care in lower-cost settings, with options like urgent care and ambulatory surgery centers, as well as a network of home-based and community services," the statement says. "This helps lower health care costs for all, while improving access to care."

HHC said it has been working to shift non-emergent care out of emergency departments and into more accessible, affordable and appropriate settings like its urgent care locations for more than five years.

"We have reduced non-emergent emergency department visits by 10% since 2016, and nearly 40% of our surgeries are now performed outside of hospitals and in more affordable settings," the statement continues. "Ambulatory surgery centers across the state allow us to deliver the highest-quality care closer to home at the most affordable cost. This makes care more affordable overall and ensures better coordination of care.”

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