By Max Friedman
In recent years, large hospital systems have not just been buying up other hospitals but have also purchased doctors’ practices. You may have noticed that your doctor’s office is now part of Hartford Healthcare, the Northeast Medical Group, or some other larger group affiliated with a major hospital system in the state.
These hospital-owned practices charge more to do the same procedures as independent offices. This is called a “facility fee” and it supposedly covers costs from being a hospital-affiliated location.
With recent acquisitions of physicians’ practices by hospitals, facility fees have popped up more and more. However, a new Federal budget deal approved may change that.
In the deal, any current hospital-owned practice can continue to charge higher prices but will prevent future acquired practices from charging these fees unless they are actually located “on the campus” of a hospital. This could slow down the trend of health care consolidation by taking away the incentive to affiliate with large systems in order to charge facility fees.
Connecticut has also done some work to mitigate facility fees. Earlier this year, SB 811, a large health care regulatory law, was passed. Among its provisions are disclosure requirements on facility fees, mandating that providers inform patients that they are being charged more because the office is owned by a hospital. Here is a description of how SB 811 deals with facility fees, from Arielle Levin Becker of the CT Mirror:
- Starting in 2016, all billing statements that include a facility fee must clearly identify the facility fee and include a statement that the facility fee is intended to cover the hospital’s operational expenses and that the patient might have paid less if the services were provided at a facility not owned by a hospital. Patients will also have to be notified of their right to request a reduction of the fee, and a telephone number to call to request it.
- If a hospital buys a physician practice or medical facility and is likely to begin charging facility fees, it would have to notify patients.
- Beginning in 2017, facility fees would not be allowed for certain outpatient physician office visits.
These actions will help defray some of the effects of consolidation, but patients will still face rising insurance premiums and deductibles due to rising provider prices. There is more work to do to protect people from being caught in the crossfire between ever expanding insurers and providers.