Hospital facility fees lack transparency, lawmakers say - FOX 31 Denver

DENVER (KDVR) — Few topics have generated as much viewer feedback for the Problem Solvers as hospital facility fees. “It does feel like surprise billing,” said an Arapahoe County mom named Connie, who asked FOX31 not to use her last name.

“I’m an accountant by trade and I can’t understand the bills,” said Connie, who took her teenage daughter for mental health therapy at the Gary Pavilion located behind Children’s Hospital Colorado in Aurora.

The doctor’s office is owned by Children’s Hospital Colorado. There was a provider fee for the therapist, $375 per hour of therapy, and a $611 facility fee charged by Children’s Hospital merely for using the therapist’s office. The Problem Solvers learned that even when some of the therapy sessions were done remotely because of COVID, Children’s Hospital still charged a facilities fee.

Dad charged $503 ‘facility fee’ for kid’s doctor visit

“It’s outrageous charging a facility fee for telemedicine,” Connie said.

So far, only the state of Connecticut has banned facility fees for telemedicine visits.

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Colorado lawmakers consider action

Colorado lawmakers have not talked about banning facility fees, but Colorado representatives from both sides of the aisle told the Problem Solvers there may be a need for greater transparency.

“I think that makes sense,” House Minority Leader Hugh McKean said.

McKean, a Republican lawmaker from Loveland, reached out after watching the first Problem Solvers story about facility fees in January.

Hospital bills $847 ‘facility fee’ for telehealth visit

In 2018, Colorado passed legislation requiring stand-alone emergency rooms to post prices for the 25 most common procedures they perform. McKean told FOX31 he believes doctor offices that have facility fees should be required to post them at the time of service.

“Requiring transparency is the very best thing you can do, because the consumer needs to know. Because if the facility fee is so high it’s keeping the consumer from getting the care they need, then that gets us to that point to say we need to find some other way, some other mechanism, to make sure that hospitals and doctors can stay in business but that people that can afford to go see them,” McKean said.

“I am starting to hear more and more complaints about (facility fees),” said Susan Lontine, a House Democrat who represents District 1 in southwest Denver. “Transparency should always be a part, how much are you going to pay … and it shouldn’t be a surprise.”

Making medical bills easier to understand

Connie, the woman whose daughter saw a doctor at Children’s Hospital, told the Problem Solvers lawmakers shouldn’t only force hospitals and any imaging clinics or physician practices they own to post facility fee prices, they should also force medical bills to show more clearly if a facility fee is one of the services being billed for.

“I felt like it was price gouging,” she said. “I’ve often thought explanation of benefits should be non-explanation of benefits because you can’t reach any kind of conclusions on those forms.”

“I don’t think it’s a bad question to say the state says you’ve got to show people what (the facility fee) is,” McKean said, “and I think the natural reaction to that is then you don’t charge outrageous fees where it doesn’t make sense.”

How are US states regulating hospital facility fees?

The Colorado Consumer Health Initiative compiled a list of what states have done related to facility fees as of last summer, although some of the bills introduced in 2021 may have since passed or died.

Also, the National Academy for State Health Policy has written model legislation that states could adopt to manage the rising consumer costs associated with facility fees. The proposed act aims to both restrict facility fee use based on location and services and provide greater transparency by requiring annual reporting by hospitals of facility fees charged.

This model legislation prohibits site-specific facility fees for services rendered at physician practices and clinics located more than 250 yards from a hospital campus. It also prohibits all service-specific facility fees for typical outpatient services that are billed using evaluation and management codes, even if those services are provided on a hospital campus.

Connecticut

SB00811 enacted in 2015, revisions introduced as HB05487 in 2020. Requires reporting of facility fees to the state, requires facility fee bill formatting, requires notice of facility billing in locations necessary. Banned telehealth facility fees through June 30, 2023, by Public Act 21-9.SB00993 introduced in 2015. Failed. Requires hospitals to post notice of facility fees on websites.SB00445 enacted in 2017. Requires hospitals to provide written notice of facility fees to consumers before services.HB0488 introduced in 2021. Requires yearly hospital reporting specifications of consumers who requested/received reductions of facility fees.

Delaware

SB 171 introduced in 2020. Failed. Created regulations around the conditions where a consumer could be charged facility fees when receiving treatment in an urgent care facility.

Florida

HB 1157 enacted in 2021. Prohibits hospital-based emergency rooms from identifying as urgent care centers. Requires publishing notices that facility fees will be charged.

Kansas

SB 122 introduced in 2016. Failed. Requires that hospitals provide written notice of facility fees incurred and provide prominent displays of facility fees at the location of service.

Maryland

HB 915 (or S632) enacted in 2020. Requires that hospitals provide separate written notice to inform consumers of facility fees/rates before receiving services. Notice must include alternative provider locations where no facility fee is charged. Requires yearly hospital transparency report listing rate-regulated services provided.

Massachusetts:

S700 introduced in 2020. Moved to 2021 session, no further action taken. Hospitals must inform consumers of the potential for facility fees before delivery of nonemergency services. All hospital-based facilities must clearly label this designation on site and online.

Mississippi:

SB 2772 introduced in 2021, died in committee. Prohibits health insurance plans from limiting coverage to provider-to-provider consultations only. Patients in patient-to-provider consultation will not be subject to facility fees. Telehealth subject to same coverage as in person care.

Missouri

HB 2311 introduced in 2020. Not yet passed. Prohibits provider-based facilities from charging a facility fee unless the consumer is covered by Medicare.

New York

AB 3470 introduced in 2021. Prohibits all providers from charging facility fees that are not covered by health insurance, unless the patient was notified of fees (amount, purpose) at least seven days before date of service.AB 8639 introduced in 2020. Requires hospitals to provide a comprehensible itemized bill to consumers. Prohibits licensed health care professionals from charging facility fees, with exceptions.

Ohio

HB 122 introduced in 2021. Prohibits health professionals providing telehealth services from charging facility fees.

Oregon

SB 889 introduced in 2019. Requires hospitals to report facility fee data to the state. Requires notice of facility fee-charging at the facility. Requires billing statement formatting for facility fees. Permits authority for civil penalty of hospitals for noncompliance.

Pennsylvania

HB 1723 introduced in 2021. Prohibits health providers from charging facility fees for services provided at off-campus facilities. Also prohibits charging COVID-19 related fees for facility maintenance.

Texas

SB 2038 enacted in 2021. ER facilities associated with hospitals must disclose facility fees for vaccines of infectious diseases based on a state of disaster (COVID-19 vaccines). Prohibits facilities from charging consumers an “unconscionable” price for products or services.

Vermont

H. 727 introduced 2020. Not yet passed. Requires health insurance plans to reimburse physical therapists for services at the same amount regardless of where services were provided.

Washington

Initial bill enacted in 2013, amended (Sec. 4.) in 2021. Providers must notify consumers before services that they may receive a facility fee, must also be advertised both on-site and online. Hospitals must release yearly financial report detailing clinics operated by hospitals, clients seen, revenue collected from facility fees.

Response from the Colorado Hospital Association

The Colorado Hospital Association released the following statement to FOX31 on the issue of Facility Fees:

“Colorado hospitals and health systems recognize that hospital billing is highly complex and variable, and as patients take on a larger share of their health care costs with higher deductibles and copays, they want to better understand the costs associated with their care.

“The term “facility fee” is a bit of a misnomer. While it sounds like a fee for the use of a facility, the reality is that it is how everything else, beyond the provider’s fee, gets paid for. That means non-physician clinical staff (like nurses and medical assistants), investments in new technology and infrastructure (including electronic health records), and many other “behind the scenes” services the hospital or the hospital-owned practice provides, like housekeeping and sterilization services, scheduling and financial assistance, and more.

“Additionally, hospital-owned practices and clinics must meet the same requirements and regulations as hospitals, such as licensure, heightened health and safety rules, billing integration, and more – even if they are located off of the main hospital campus. That means that the costs to operate a hospital-based clinic versus an independent physician’s office or clinic are very different.

“With respect to virtual care, Colorado hospitals and health systems made extraordinary investments in new technology and training to move care online and ensure that essential services were maintained while also providing the largest-ever coordinated response to the global COVID-19 pandemic. Receiving care virtually does not change the need for all the additional work that goes into a health care visit such as nursing support, testing, analysis, and billing. In fact, the convenience we receive as part of a virtual visit often increases those costs, which must be accounted for.

“As always, Colorado hospitals and health systems are committed to helping patients navigate the complicated billing process. They have financial counselors available to talk through a cost estimate, and many have robust online estimator tools. CHA also strongly encourages all Coloradans to also talk with their insurance provider to better understand their current plan and what their out-of-pocket financial responsibility will be.”

Colorado Hospital Association

Response from Children’s Hospital Colorado

Children’s Hospital Colorado released the following statement to FOX31 on the issue of Facility Fees

We agree that insurance coverage, healthcare fees and health costs in general can be confusing and frustrating to navigate, which is why we have supported multiple price transparency laws in Colorado. As a pediatric specialty hospital provider, Children’s Hospital Colorado is committed to price transparency, helping families understand the cost of care, and continually improving upon the delivery of care and the experience of families.

Medical bills from Children’s Hospital Colorado are based on the cost, level, length and type of care that is provided. They include all clinical expenses, such as nursing, therapists, clinical and administrative support staff, equipment and supplies, technology, and our physical and IT infrastructure.

We offer many resources to help families understand the cost of care, including:

• A review of a patient’s insurance eligibility with schedulers when they’re making an appointment.

• A cost estimate tool on our website and through MyChart that allows patient families to estimate in advance the out-of-pocket costs for our most common services, customized to their specific insurance plan. 

• A Cost Estimate team to help patients with any on-demand estimate request during business hours.

• A price transparency and disclosure webpage that lists our hospital charges for clinical services, as well as common emergency department, inpatient, and outpatient services, and more.

• We also offer financial assistance to help patients without insurance, and payment plans are available for all families.

Children’s Hospital Colorado

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