Jepsen takes aim at health care ‘facility fees’

Hospitals are increasingly acquiring medical practices, and for many patients, that’s meant new, often unanticipated charges known as facility fees.

The practice has drawn scrutiny from the state healthcare advocate, and on Thursday, Attorney General George Jepsen announced that he would take aim at the fees too. He plans to seek legislation requiring medical offices to clearly disclose if they’ll charge patients a facility fee.

Facility fees are charges patients can receive if they have in-office procedures performed at medical offices owned by a hospital or that use hospital-owned equipment. The fees are in addition to the bill for the doctor’s services, and in some cases, have cost unsuspecting patients thousands of dollars. Michael Lipkin, a Stamford resident who got a $5,000 bill for an electrocardiogram and sonogram his teenage daughter received at a medical office in a residential neighborhood, said it was like going to a restaurant, eating a burger, then getting a bill for $5,000.

Hospital officials say the facility fees reflect the overhead costs of the practices and hospital, and the higher standards that hospital-owned practices meet.

But state Healthcare Advocate Victoria Veltri, whose office has helped patients facing large, unexpected facility fees, says the practice inflates the cost of health care and leaves patients with unreasonable bills.

Jepsen said Thursday that the issue has come up in discussions with other state attorneys general.

“It’s increasingly bubbling to the surface, and we’re starting to receive complaints about it here in Connecticut,” he said. “It’s because the industry is consolidating and integrating itself vertically more and more.”

The legislation Jepsen plans to seek next year would require hospital-based health care providers that charge facility fees to disclose in writing the amount patients would be charged and the cost of the fees. In addition, he plans to propose that those providers “prominently display” written notices indicating that the office is part of a hospital and charges separate facility and professional fees.

“Often, a patient does not know that the physician they’ve relied on for years or the urgent care center they visited just a few months ago has been acquired by a hospital and that they will now potentially be subject to additional facility fees,” Jepsen said in a statement “Suddenly, a procedure that was one price during their last visit now includes a separate charge that adds hundreds if not thousands of dollars to their bill. Equally disturbing, the patient may not learn of the facility fees until they show up for their treatment or when the bill shows up in their mailbox.”

In response, the Connecticut Hospital Association issued a statement saying it looked forward to working with the attorney general’s office and legislators on the issue.

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

In the past, officials involved in hospital billing said it can be difficult to tell patients up-front how much they’d have to pay for a facility fee because it often depends on their insurance carrier and whether they have to meet a deductible or other plan designs.

Hospitals say medical offices disclose to patients that they’ll get two separate bills, but critics of the practice say it’s not clear to patients that the charges will be higher than what they’re used to paying.

Wilton resident Susan Ferro learned last year what a facility fee was after she got a $4,000 bill for a biopsy. At first, she thought the bill was a mistake, since she’d had the same procedure at the same radiology office two years before, and her insurance covered it.

But after calling the doctor’s office, Ferro learned that the practice had been bought by a hospital, and was now billing differently, treating it as if she’d received an outpatient procedure at a hospital. That meant the charge went to her deductible, leaving her to pay the cost.

She said it was particularly frustrating because she didn’t know about the charge ahead of time. If she had, she said, she’d have gone to another practice for the biopsy.

Jepsen said Thursday’s announcement marked the beginning of a process of due diligence, and that he would be reaching out to hospitals and consumer groups.

Veltri said her office endorsed Jepsen’s proposed legislation, and said she’d also like to see each facility publicly disclose its most common procedures and the corresponding facility fees.

“Generally, these fees often vary from tens of dollars to thousands of dollars [and] are neither clearly described nor disclosed to patients prior to getting healthcare services, resulting in significant and unexpected financial liability,” she said.

Veltri added that her office had asked the federal government to rein in the use of facility fees