The problem is becoming increasingly common when hospitals buy up medical practices. Hospitals often add fees for the use of the facilities to inpatient bills, because even providing an aspirin tablet to an admitted patient requires complex and expensive infrastructure.
In some cases, hospital-owned “health systems” now add inpatient treatment fees to bills for preventive care and routine nursing care provided by hospital-owned physician and gynecologist offices. Treatment fees can turn prenatal, baby, or adult checkups that once cost less than $500 into bills of $10,000 or more.
The state of Colorado has attempted to address the facility fee problem by requiring “off-campus” hospitals to apply for and use their own “national provider identifiers,” or identification numbers, so that self-funded employer health plans, health insurers, and other payers can identify whether high facility fees are for care provided at a hospital or for an infant exam at a doctor’s office that happens to be owned by a hospital.
What it means:
Your employer customers and their plan insurers or administrators may soon be faced with more bills that differentiate between care provided in hospitals and care provided in regular, hospital-owned physician offices.
The presentation
Rachel Swindle, a research associate at Georgetown University’s Center on Health Insurance Reforms, discussed Colorado’s facility identification approach as part of a Regulatory Framework Task Force presentation that examined five major types of state responses to facility fee concerns.
Some states ban certain types of facility fees, require disclosure of costs to patients or prohibit providers and plans from charging patients facility fees for care at hospitals’ “off-site facilities,” according to a copy of Swindle’s presentations included in a packet for a task force meeting.
Several states require annual facility fee reports.
Colorado’s Facility ID approach could help employers and other payers understand their bills, Swindle told task force members.
“One challenge for Colorado, however, is tracking the connections between the different sites,” Swindle said.
Colorado is trying to solve this problem by requiring hospitals to submit an annual report on the off-campus facilities they own or have recently acquired.
Perspective of the performance groups
The Business Group on Health has addressed the issue of facility fees, saying that federal regulators should “require price transparency for all facilities and provider types, including facility fees for physician services in the hospital and rates for out-of-network services at in-network facilities.”
“Facility fees are considered the primary factor in the rapid growth in emergency care costs we have seen over the past two decades,” Trautwein wrote. “On average, from 2004 to 2021, facility fees grew an incredible four times faster (531%) than fees for emergency department evaluation and management (132%).”
An external analysis has shown that private health insurers and their policyholders could save $152 billion over a ten-year period by preventing health care providers from charging higher fees for treatments in some locations than in others, Trautwein wrote.
congress
The House of Representatives is considering at least two bills that could create a federal requirement that hospitals’ off-campus facilities obtain their own identification numbers.
One of them is the Lower Costs, More Transparency Act, introduced by Representative Cathy McMorris Rodgers (R-Wash.) and co-sponsored by two Republicans and one Democrat.
