December 27, 2015

Outpatient Facility Fees To Be More Transparent With New Law

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Patients billed for a facility fee for outpatient hospital services will get a clearer explanation of the charge, under legislation taking effect Friday.

Connecticut has taken various steps to educate patients about the fees. The latest changes, passed this year as part of a broader health care bill, put further mandates on institutions that charge the fees.

Patients have complained they were blindsided by the fees on their medical bills, and patient advocates say the fees are difficult to understand.

A facility fee is charged by a hospital or health system for outpatient services provided in a hospital facility, intended specifically to compensate the facility for operational expenses.

The fees have become more widespread in Connecticut as hospitals increasingly acquire physicians’ practices, said state Attorney General George Jepsen, who has been among the most vocal advocates for more transparency.

“Beginning in 2014, I began receiving more frequent complaints from patients that they were receiving unexpected—and, in some cases, very large—bills for services,” Jepsen said. “Most were unaware that their regular doctor or specialist, who they might have been seeing for years at that point, had been acquired by a hospital and that they would now be subject to these facility fees.”

The law, taking effect Jan. 1, requires that any hospital or health system that acquires a physician group and plans to charge facility fees must notify all patients from the previous three years. The notification must take place within 30 days of acquisition.

Every billing statement that includes a facility fee must: clearly identify the fee; make it clear the fee is intended to cover operational expenses; and include written notice of patients’ right to request that the fee, or any other portion of the bill, be reduced.

Many patients were “shocked and surprised” to see the fees on their bills and don’t understand what they are for, said Demian Fontanella, general counsel at the state Office of the Healthcare Advocate.

“There’s no rhyme or reason whatsoever,” he said, adding different hospitals call the fees different things and charge different amounts. “They’re not linked to anything in reality, as far as I can tell.”

Hospitals want patients to be able to understand their bills, according to Michele Sharp, spokeswoman for the Connecticut Hospital Association.

“Connecticut hospitals support efforts to make pricing more transparent and meaningful for consumers,” she said.

Robert Gelormino, 82, was stunned to see the fees start appearing on bills after his wife Shirley, 83, was treated in Torrington for a leg injury earlier this year.

His wife underwent eight weekly treatments at a wound center, which the couple didn’t realize at the time is affiliated with the Charlotte Hungerford Hospital, Gelormino said.

At each appointment, he said, his wife paid a $35 co-pay. But after the final visit, he said, “we were hit with one charge after the other, after the other, after the other. We didn’t even know what the heck was going on, and objected to them.”

In all, the couple was charged facility fees totaling around $800, he said.

“They should have told us that, in addition to our regular co-pays, there could be additional facility fees,” he said. “No one gave us that information.”

Working with the health care advocate’s office over the course of months, the Gelorminos eventually got most of the fees waived—but their worries persist. Robert Gelormino suffered a stroke in November and the cardiologist he is seeing is affiliated with Charlotte Hungerford Hospital, so the couple is bracing for more fees.

The new law isn’t the first time Connecticut has acted to remedy consumer concerns. In 2014, Jepsen issued a report and urged state lawmakers to adopt disclosure requirements for facility fees. That legislation ultimately was enacted.

But not all hospitals have met that law’s requirements, Fontanella said. “We’re not seeing a lot of really good compliance,” he said. “We’re seeing efforts.”

Additional transparency, like that mandated in the new law taking effect Jan. 1, should help, he said.

In the meantime, many consumers have learned the hard way that the fees often are applied to an insurance plan’s hospital deductible, Jepsen said. That usually is significantly more than the deductible for a physician visit, resulting in higher out-of-pocket costs for patients, he said.

Sharp said that in 2013 hospitals agreed to provide patients with information about facility fees in advance of their treatment and “since then we have worked with the attorney general’s office and legislators on legislation to formalize the commitment hospitals have already made to patients.”

4 thoughts on “Outpatient Facility Fees To Be More Transparent With New Law

  1. While creating transparency, this bill does not address the problem patients face when their physician’s practice is purchased by a hospital. Nothing has changed, the overhead for the practice with the same physician and same employees has not increased, but for some reason, there is now a facility fee. How about an objective article explaining how charging a patient a facility fee for the exact same service they received from the physician owned practice is reasonable????

  2. After having read through the new laws last night I came away with the impression that nothing will change except the pricing, which will have to go up. All the ideas put forth are laudable, that said what I see is almost a half billion dollars in unfunded patient improvements. I was also struck by the fact that everything proposed for State agencies to implement has an escape clause that reads that they have to make the improvements, as long as they can afford it within their budgets. The proposals for the providers include no such clause. The joke is that the stated purpose of the law is to reign in patient costs.

  3. June, 2016. Have received an indecipherable letter again from YNHHS regarding facility fees. There is no firm amount of the charges listed anywhere, only estimates. These estimates should be more transparent after patient has been visiting doctors at this “facility” for 5-1/2 years, getting exactly the same treatment. Does Medicare allow balance billing? This hospital finds loopholes through all legislation. Now they are adding physician fees, lab fees, facility fees into the same toxic mix. CT Public Act 14-145 states that sections A – d, inclusive, do not apply to Medicare or Medicaid patients. What is that about?

  4. this organization should make the public aware of this via e mail, facebook, and twitter – and the public shuld force the Conn legislature to pass a law prohibiting this legal fraud perpetrated on the public. I personally will make sure all my doctors are not “hospital employees”

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