When Brittany Tesso’s then 3-year-old son Roman needed speech therapy evaluation in 2021, his pediatrician referred him to Children’s Hospital Colorado in Aurora. When in-person visits were halted due to the covid-19 pandemic, Tessos met with a panel of experts via video chat.
Experts, some of whom appeared to be phoning from their homes, observed Roman talking, playing with toys and eating chicken nuggets. They asked about his diet.
Related: Virtual prescribing of controlled substances is in limbo as PHE ends
Tesso thinks the $676.86 bill she gets for the hour-long session is pretty high. When she received a second bill of $847.35, she assumed it was a mistake. Then she learned that the second bill was for hospital visits – equipment, medical records, and support staff.
“I don’t go to your facility,” she argued, arguing the charges with the hospital’s billing representative. “They don’t use any equipment.”
This is the facility fee, the hospital staff told her, and it is charged to every patient.
“Even for a telehealth consultation?” Tesso laughed in disbelief, which quickly turned to anger.
Similarly, millions of Americans are blindsided by hospital bills for doctor’s appointments without ever going to the hospital. Hospitals argue that facility fees are necessary to pay for staff and overhead, especially when hospitals do not hire their own doctors. But consumer advocates say there’s no reason hospitals should charge more than independent clinics for the same service.
“If there’s no change in patient care, at best the fee seems artificial,” said Aditi Sen, a health economist at Johns Hopkins University.
At least eight states agree that such charges are questionable. They have implemented limits on facilities fees or are moving to control fees. Among them are Connecticut, which has capped facility fees, and Colorado, where lawmakers are considering a similar measure. Together, the initiatives could signal a wave of restrictions similar to the movement that led to a federal law banning surprise bills, which went into effect last year.
Representative Emily Sirota, the Denver Democrat who sponsored the Colorado bill, said: “Facilities fees are simply another way hospital CEOs are pocketing money for the hospital. patient.
Generally, patients at independent doctor’s clinics receive a single bill that includes the doctor’s fees as well as the overall costs. But when the clinic is owned by a hospital, patients often receive separate bills for doctor fees and facilities fees. In some cases, the hospital sends a bill for both charges. Medicare reduces the doctor’s payment when charging the facility. But private health plans and hospitals do not disclose how they charge doctors and facilities.
Colorado Children’s Hospital officials declined to comment on the specifics of Tesso’s experience but said that facility fees cover other costs of running the hospital.
Not a Modern Healthcare subscriber? Sign up today.
Zach Zaslow, Children’s Hospital senior director of government affairs said in a February call with reporters: “These payments for outpatient care are how we do it. I pay our nurses, child life specialists or social workers. “That’s how we buy and maintain our imaging equipment, our labs, our diagnostic tests, really all the care you’d expect when you go to a children’s hospital.”
Research shows that when hospitals buy practice doctors and hire them, the physician’s professional fees go up, and with the addition of facilities fees, the total cost of care for the patient increases. multiplier also increases. Other factors are also at play. For example, health plans pay negotiated rates with hospitals, and hospitals have more market power than independent clinics to demand higher rates.
Those economic forces have fueled consolidation, as hospital systems devour doctor’s clinics. According to the Physicians Advocacy Institute, 3 out of 4 doctors are working for hospitals, health systems or other corporate organizations. And less competition often leads to higher prices.
One study found that prices for services provided by doctors increased by an average of 14% after a hospital acquisition. Another found that bills for lab tests and imaging, such as MRI or CT scans, spiked after getting a practice.
Sen said patients who come to pick up the lab at the hospital’s outpatient department pay three times what they would pay at the office. “It’s hard to argue that the hospital’s outpatient department is doing it differently with better outcomes,” she said.
Hospital officials say they get the doctor’s actions to maintain care options for patients. “Many of those doctors are not viable and they have a hard time making a living, which is why they want to be acquired,” said Julie Lonborg, senior vice president of the Colorado Hospital Association.
Along with Colorado and Connecticut, other states that have implemented or are considering facility fee limits are Indiana, Minnesota, New Hampshire, Ohio, Texas, and Washington. Those measures include collecting data on facility fees charged by hospitals, prohibiting additional charges for telehealth, and requiring on-site neutrality payments for some Medicaid services. A federal bill introduced in 2022 would require hospital outpatient departments outside of campus to bill as physician providers, eliminating the ability to charge facilities.
Connecticut has gone the furthest, banning facility fees for basic doctor visits off campus and for telehealth appointments through June 2024. But the application of the law remains in place. restrictions and with healthcare costs on the rise, the number of facility fees in Connecticut continues to rise.
“It hasn’t changed much, in part because there’s so much money involved,” said Ted Doolittle, head of the state’s Health Care Advocacy Office. “They couldn’t get that needle out of their arm easily. They are addicted to it.”
The Colorado measure would prohibit facility fees for primary care visits, cost-sharing exempt preventive care services, and telehealth appointments. Hospitals will also be required to notify patients if facility fees apply. The ban will not apply to rural hospitals. The bill has been scaled back from a much broader proposal following criticism from hospitals over its potential consequences.
Rural hospital executives, like Kevin Stansbury, CEO of Lincoln Health, a small community hospital in the eastern Colorado town of Hugo, have been particularly worried about the impact of the toll ban. The state hospital association estimates his hospital would lose up to $13 million a year if facility fees were banned. The 37-bed hospital made $22 million in revenue from patients last year, resulting in a loss. Stansbury said it is only open through local taxes.
“This will still harm access to care – and especially the essential primary and preventive care that are helping Coloradoans stay healthier and stay out of the hospital,” Lonborg said of the approach. amendment law. “It will also have an adverse impact on access to specialty care through telehealth, on which many Coloradons, especially in rural areas of the state, have come to depend on.” .”
The Colorado bill presents special challenges for health systems such as Children’s Hospital and UC Health, which rely on the University of Colorado School of Medicine for staffing. For outpatient appointments, the medical school charges the doctor, while the hospital charges the facility.
Download Modern Healthcare’s app to stay informed when there’s breaking industry news.
“Professional fees are only for providers, and very often, they are not employed by us,” said Dan Weaver, UC Health vice president of communications. “None of that supports the clinic or the staff.”
Without the facility fee, the hospital would not receive any payment for outpatient services covered by the ban. The combination of clinician and facility fees is often higher than those charged by independent clinics, Weaver said, because hospitals provide additional services that independent physician clinics cannot afford. .
“Prohibition of facility fees for primary care and telehealth services will still cause significant problems for patients across our state, forcing some clinics must close and make patients unable to access the care they need.
Supporters of the Colorado bill disagree.
“Their cost and revenue data paint a slightly different picture of health,” said Isabel Cruz, policy director for the Colorado Consumer Health Initiative, which supports the bill. their finances.
From 2019 to 2022, UC Health has net income of $2.8 billion, including investment gains and losses.
The Colorado market is dominated by large health systems that can offer higher rates to health plans. Plans pass those costs through higher premiums or out-of-pocket costs.
“Unless employers and patients are bearing the brunt of the price tag that is sounding the alarm,” said Christopher Whaley, a healthcare economist with the nonprofit consulting group Rand Corp. , there’s really no strong incentive for health plans to combat this.
Consumer complaints helped pave the way for the federal No Surprise Act, which protects against unforeseen out-of-network bills. But many have trouble with facility fees — about half of patients versus a quarter of hospitalized patients receive unexpected bills, Whaley said.
Dr Mark Fendrick, a professor of health policy at the University of Michigan, said facility fees are generally surprising but not within the definition of the No Surprise Act. And with the rise of high-deductible plans, patients are more likely to have to pay those fees themselves.
“It falls on the patient,” Fendrick said. “It’s a tax on sick people.”
Tesso delayed paying the facility fee for his son’s visit for as long as possible. And when her pediatrician referred them to Children’s Hospital again, she called to ask what the facility fee would be. The hospital offers a price of $994, in addition to the doctor’s fee. Instead, she took her son to an independent doctor and paid a $50 copay.
Kaiser Health News is a national health policy news service. This is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
