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Attorney General’s Report on Hospital Facility Fees Encourages Legislative Action

by Christine Stuart | Apr 17, 2014 5:30am
(7) Comments | Commenting has expired
Posted to: Business, Health Care, Transparency

CTNJ file photo

Attorney General George Jepsen

According to a report from Attorney General George Jepsen, 22 of the state’s 29 hospitals are now charging separate facility and professional fees along with services at their newly acquired outpatient departments or clinics.

Facility and professional fees, which can range from $100 to $1,000, are separate from a patient’s co-pay and they often take patients by surprise. Although hospitals have always charged facility fees for the use of the hospital itself, Jepsen’s report identifies the relatively recent phenomenon of hospitals charging patients such fees for services rendered in offices they own outside the main hospital building. This means that as more previously independent clinics and physicians are acquired by hospitals, more patients are charged hospital facility fees.

Facility fees can be expensive, surprising and confusing for patients, which is why Jepsen’s office undertook its review. Jepsen said his office has fielded about 70 complaints from consumers who have been charged these fees.

The complaints are similar. A patient goes to a dermatologist office for a routine skin biopsy and is charged $390. The office is close to a hospital and the patient has been going there for years. She is unaware the practice was acquired by the hospital, so when she returns for the same procedure she’s surprised that she’s asked to pay a $170 facility fee.

Jepsen’s review of the facility fees found that 12 hospitals notify all patients to expect two separate fees for their medical services. Another 13 hospitals reported that they only provided notice of facility fees to Medicare patients, and four said they notified uninsured or “self-pay” patients of the additional fee. Seven hospitals told Jepsen’s office they did not provide any notice of a facility fee to their patients. Only one of the 29 hospitals surveyed included the existence of separate billing for the hospital and physician fee in a patient brochure.

Of the hospitals or practices that do provide a notice of the fee, most provided the information at the time the patient arrives and some provided the information in advance if a patient made an appointment far enough in advance.

A few of these notices were in plain language and on colored paper or bullet-pointed to help patients understand they would be charged two separate fees, the report found.

“However, none of the hospitals that were willing to provide patients with notice of the precise amount of potential liability for separate facility and professional fees or even a best estimate, would do so unless specifically requested by the patient,” the report stated.

And even though hospitals provided photographs of outdoor and indoor signs and websites identifying that the outpatient facility was part of the hospitals, “the extent to which consumers understand the signage is determined by its content and placement.” The report concluded that most of the patients were unaware of the facility fees.

“Several hospitals acknowledged the need for greater patient information and expressed their willingness to examine their facility fee policies, to their credit,” Jepsen said. “However, I strongly believe that this year’s legislation is important to ensure that all patients receive adequate notice, prior to treatment, so they can make informed choices about their health care and about whether or not to visit a practice that charges facility fees.”

The legislation concerning facility fees was approved by the General Law and Public Health Committees and is awaiting action in the House. The legislation is supported by the Connecticut Hospital Association.

Connecticut hospitals support efforts to make pricing more transparent, and agree that when seeking a physician, patients should not be surprised to learn after the fact that they are being treated at a hospital, or that they will receive two bills and the facility fee covers a portion of the hospital’s ongoing operating expense, Michele Sharp, a spokeswoman for the Connecticut Hospital Association, said Wednesday.

In January, the Connecticut Hospital Association’s Board of Trustees unanimously adopted a recommendation that all Connecticut hospitals provide patients with information about facility fees in advance of their treatment. Specifically, it recommended that all Connecticut hospitals voluntarily adopt changes to improve pricing transparency.

Jepsen said he would like to see the legislation passed to mandate the disclosure of these fees.

Jepsen is also supporting legislation concerning greater transparency in physician acquisitions. That bill passed the Public Health Committee and is awaiting action in the Senate.

Advocates and labor unions concerned about the potential conversion of nonprofit hospitals to for-profit hospitals credited the report as making yet another strong and compelling case for increased regulation and oversight of the rapidly-changing hospital industry.

But they went further than the attorney general and recommended the passage of three more bills. In addition to the two bills highlighted by Jepsen, advocates and labor unions would like to see the legislature tackle the following: Senate Bill 460: An Act Concerning Hospital Conversions and Other Matters Affecting Hospitals, House Bill 5257: An Act Concerning Hospital Employees and Hospital Conversions, and House Bill 5384 : An Act Concerning Reports of Nurse Staffing Levels
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“The Attorney General’s report sheds light on serious issues that must be addressed before any for-profit takeovers,” Tom Swan, executive director of the Connecticut Citizens Action Group, said. “And these are just the tip of the iceberg. We can’t let Wall Street profiteers run our health care system. State legislators have to act now to protect quality care for patients, caregivers and communities.”

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(7) Comments

posted by: GBear423 | April 17, 2014  6:34am

GBear423

This would have been impressive had it been done early in his term, but as they say better late than never.  This Bill is a great example of what should be in the Obamacare Law. The billing practices are by design a means to inflate costs in health care. Its time to be honest with the consumers!  Call/write your rep and get them to support this bill!

posted by: Kathy Lauretano | April 17, 2014  7:58am

What this article does not address is the increasing state taxation drain on all hospital’s bottom lines, forcing them to cut personnel and services or find another way to bring in enough money to maintain services.  The Hospital Provider tax, Rep. Brendan Sharkey’s new bill to expand property taxation to hospitals, and the new 20% corporate tax surcharge that hits Sharon Hospital as the only for-profit in the state are all destabilizing our hospitals and they are all looking for ways to stay afloat and viable.  The public is going to be in deep trouble when our hospitals begin closing - and they will.

posted by: Noteworthy | April 17, 2014  1:40pm

The hospitals are buying all the practices, all the related entities - in effect, eliminating consumer choice if they wish to avoid “facility fees.” The practice should be outlawed altogether. Before the hospital acquisition, there was no facility fee or an alleged need. This is just another way the medical establishment continues to rip off consumers. It’s time for it to stop.

posted by: dano860 | April 17, 2014  8:53pm

Out here in the east they have been retiring and firing the under performing doctors at Day Kimball Hospital.
Profit margin it’s the life blood of the facility so bring in the young, lesser paid with the new techniques for the greater good of the institution.

posted by: Kathy Lauretano | April 18, 2014  9:10am

I agree that obviously this must be corrected so patients know ahead of time about the facility fees, but one cannot lose sight of the government created financial instability of our hospitals, all but one of which are non-profits.  Do not lose sight of the fact that we need the hospitals.  If we lose them we lose more of our healthcare resources, already being undermined and lost due to Obamacare. Do not criticize the hospitals for trying to survive and balance their budgets so they can continue to provide services.  And the doctors deserve to be paid what they are owed, not just half of it, which is about where Medicaid and Medicare are now.  Would you continue working at something if you were only paid half of what you were owed? Federal Law also requires hospitals to treat the poor for free, with the promise that they will be PARTIALLY reimbursed according to one of those infamous federal formulas that favors big inner city hospitals.  States make an effort to partially make up the difference to the hospitals, but fall short.  That deficit in covering the care of the poor has to be made up somehow or the hospital will go belly-up bust.  Then the area population has to go farther for their emergency and other hospital services, causing not only more inconvenience but emergency cases will be permanently disabled or die because of the delay getting them to an Emergency Room in timely fashion.  This is a very complicated problem and just knee-jerk dumping on the doctors and the hospital entities is superficial analysis and not conducive to finding useful solutions.

posted by: Daniels Jeffrey | April 22, 2014  11:20am

Interesting article, but the reports do not address the larger issues.  Is it appropriate to charge this separate fee; and what are the standards to determine how much it is.  Finally, is the fee structure consistent across all hospitals?

posted by: Kathy Lauretano | April 22, 2014  8:04pm

the fee schedule is skewed to send most of the reimbursement funds to big city hospitals - more income redistribution, so to speak - leaving smaller hospitals outside the cities to run deeper into fiscal imbalance.  The Provider Tax is ridiculous - taxing hospitals for providing health and life saving services, thereby jeopardizing their financial viability.  And if they try to recoup it from patients it just pushes healthcare costs higher and in turn raises the amount of the Provider Tax the hospital pays the state so it is a vicious circle.