The Basics: CT’s effort to notify patients of added medical fees

The state House of Representatives Wednesday passed a bill aimed at making sure patients know about extra charges they could face if they get outpatient care at medical offices owned by hospitals. The proposal, which passed unanimously, now goes to the Senate.

What does the bill do?

Medical practices owned by hospitals can charge patients “facility fees” — charges separate from doctor fees that often cost hundreds or thousands of dollars. Many patients say they didn’t realize they would face the additional charges until they got the bill.

The proposal would require that patients who schedule appointments at medical offices where facility fees are charged receive plain-language notice about the fees.

Here’s an example of what that would mean for patients:

Wilton resident Susan Ferro had a biopsy performed at an outpatient radiology office in 2010 and another in 2012. The first time, her insurance covered the whole bill. But before the second procedure, the medical office was acquired by a hospital, unbeknownst to Ferro. That allowed the office to bill for her 2012 biopsy as if it had been performed in a hospital. And Ferro, whose insurance had a deductible for hospital services, was left with a $4,000 bill.

If the proposal becomes law, hospitals would be required to give patients like Ferro written, plain-language notices saying that facility fees are charged, and that patients might face higher costs there compared to facilities that aren’t hospital-based.

Patients would also get information on the potential cost if they’re scheduled to receive direct care. (If the extent of the services needed or the patient’s insurance coverage isn’t known, the patient would get an estimate based on typical charges at the facility.) Patients wouldn’t get cost estimates for cases that don’t involve direct care, such as a doctor reading a lab result, because it’s harder to estimate the charges ahead of time.

Patients would receive the notice before the appointment if it’s scheduled at least 10 days in advance, so they could check if their insurance covers the fee or schedule an appointment elsewhere. If not, they’d receive the notice when they arrive at the facility. Patients getting emergency care would need to be notified as soon as practicable after being stabilized.

The bill also includes provisions aimed at making patients aware that the medical offices they’re visiting are connected to a hospital. Hospital-based facilities would also have to prominently display notice that the facility is part of a hospital and that if it charges a facility fee, patients might have to pay more there than at a facility that isn’t hospital-based.

Hospital-based facilities would also have to state the name of the hospital or health system they belong to on their signs, marketing materials, websites and stationery.

What does the bill not do?

The bill doesn’t affect hospitals’ ability to charge facility fees or limit how much they can charge.

Who does it affect?

Patients who receive outpatient services. Hospitals are increasingly buying up physician practices and opening outpatient facilities outside their main campuses, meaning that more patients could potentially be subject to facility fees.

What started it?

Many patients who have been surprised by hefty facility fees have complained to state officials. State Healthcare Advocate Victoria Veltri and Attorney General George Jepsen in particular have pushed for hospitals to give patients better notice about the fees.

According to a survey by Jepsen’s office, 22 of 29 Connecticut hospitals said they charge facility fees in outpatient departments (another one stopped the practice because of patient confusion and dissatisfaction).

What’s the debate?

Hospital officials say the higher fees reflect the higher costs and standards that hospital-based medical practices face. (A recent report released by Jepsen’s office questioned that assertion, noting that hospital-owned practices have other financial advantages, including commanding higher fees from insurers and economies of scale for purchasing.)

Although hospital officials stand by their right to charge facility fees, they agreed earlier this year to a voluntary policy that recommends that hospitals give written notice to patients at all off-campus locations of what their potential financial liability would be, if possible.

Jepsen and Veltri argued that legislation was needed to go beyond what the hospitals had voluntarily agreed to, and the Connecticut Hospital Association supported the facility fee bill.

How they voted?

The House passed the bill unanimously.

The proposal previously passed the General Law and Public Health committees unanimously.

What’s next?

The bill goes to the Senate. Gov. Dannel P. Malloy’s budget director, Benjamin Barnes, testified in favor of the bill at the committee level, an indication that the governor would be likely to sign it.