US patients charged for ‘hospital facility fees’ – even if they don’t set foot in one | US healthcare

Hospitals are gobbling up doctor’s offices — and bringing higher prices to patients when they do, even if a patient never sets foot on a hospital campus.

Enter the “hospital facility fee”: a fee that hospitals can add to bills from doctors’ offices, ambulatory surgery clinics and diagnostic centers they own, renaming them “ambulatory hospital units,” even if the facility is miles from a hospital campus.

“This is one of the most egregious examples of hospital funding at the expense of consumers,” said Liz Hagan, director of policy solutions at United States of Care, a nonprofit advocacy group that released a new report on the practice.

The report, “Behind the bill” argued that “hospitals are at the center of a massive market failure” where consolidation drives up prices for patients.

There is no record of how often charges are struck. But it’s widespread enough that one US of Care staff member was billed while writing the report — a $154.52 facility fee was added to the flu test bill.

“Ultimately, consumers are left paying the price for this – or through higher [insurance] premiums because hospital costs are built into premium costs or at the point of service,” Hagen said.

Facility fees are rooted in how hospitals billed patients in the past. For decades, hospital bills have been split into two parts – “professional fees” charged by doctors and “facility fees” charged by institutions.

Trade groups such as the American Hospital Association have lobbied against attempts to limit facility fees.

“The cost of care provided in hospitals and health systems — and all related hospital-managed care facilities — takes into account the many unique services that only they provide to their communities,” the American Hospital Association (AHA), a trade group, said.

“This includes the cost of maintaining standby capacity for trauma events and providing 24/7 care to all who pass through the emergency department, regardless of ability to pay or insurance status.”

Banning facility fees would represent “significant and unprecedented cuts to hospitals,” they argued. The AHA also claims this private capitalrather than hospitals, buy the majority of physician groups.

What is not in dispute is accelerated consolidation in healthcareand how facility fees have increased along with it. By 2022, 41% of doctors’ offices will already be affiliated with hospitals, up from 29% in 2012, according to Kaiser Family Foundation.

“We have data that show that for the same service, hospital charges are about 150 percent higher than those at ambulatory surgery centers in the same county,” said Ge Bai, a professor of health accounting at the Johns Hopkins Carey School of Business. , citing a 2023 research letter published in Jama Health Forum. An ambulatory surgery center is any clinic that provides surgical services outside of a hospital.

A studywhich used data from private insurers, found that 10% of physician practices were purchased over a six-year period from 2006 to 2013. In that study, a hospital merger resulted in an average 14.1% price increase.

It should be noted that facility fees often cannot be predicted or estimated. They can range “from $0 to thousands, with no relation to the specific service being provided,” according to the magazine Health matters.

In just one example of how facility fees vary, a Florida Hospital Survey Fees for outdoor facilities range from $5,213 to $15,759, with for-profit hospitals charging the most.

The author of that study, Miami emergency room physician Dr. Tony Zitek, said he chose the topic because he believes fees should be transparent. His own mother was hit with a service charge at a clinic – she was “very annoyed”, he said.

“My mother goes to hospital clinics and after [was] surprised by the service charge,” Zitek said. Patients can “go to another clinic that offers exactly the same service, and you don’t get that fee.”

Critics argue that government policy is driving consolidation. Care provided by hospitals is paid for more than Medicare and Medicaid, public health insurance programs that cover the elderly, disabled and low-income Americans — 115 million Americans combined. Once a clinic is purchased by a hospital, it can be reclassified as an “outpatient hospital unit” – then a “facility fee” can be charged.

Large hospital groups may also demand more money from private health insurers — the companies that provide care to Americans through their employer — because it is now more important to be included in an insurer’s network.

The AHA claims that insurers, not hospitals, are responsible for price gouging by devising complex reimbursement schemes, such as one recently uncovered with a company called Multiplane.

Facility charges have attracted the attention of bipartisan state legislators. Despite growing consolidation and concerns about how hospitals used their status to boost payments, Congress backed away from the reforms in February, according to statistics.

The report’s authors, from US of Care, called on lawmakers to stop overpaying hospital-affiliated doctors’ offices, to require reporting of facility fees and the disclosure of facility fees on bills, noting, “In many respects, hospital fees . . . and the increasing affordability burden they place on patients are symptoms of rampant provider consolidation.”