You've covered your copayment; now brace yourself for the 'facility fee'

Even if you have health insurance, you might expect to be charged a copayment for some routine care, like office-based exams and consultations. But you probably don’t expect to receive a bill a few weeks later charging you an extra $100 or more.

That’s the situation an increasing number of state lawmakers are looking to change. In most states, a “hospital facility fee” can legally appear on your bill if your doctor is affiliated with a large hospital system — even if you never set foot on the hospital’s campus.

Traditionally, hospitals and health systems add facility fees to help cover the higher costs of operating a full-service, 24/7 hospital — which include expenses such as equipment, support staff, utilities, maintenance and security. They argue the fees help them provide critical services to everyone, regardless of their ability to pay.

But increasingly, hospitals are tacking on facility fees for routine services at the smaller clinics and outpatient centers they own, even when those facilities aren’t anywhere near the hospital’s campus. The fees can add anywhere from $15 to $100 or more to a medical bill. Patients have reported being charged out-of-hospital facility fees of $503 for a pediatric visit, $488 for an appointment to get ADHD medication, and $355 for steroid injections for arthritis.

Patients aren’t the only ones upset. Employers, aghast at the soaring costs of their employees’ health insurance, have banded together in states such as Indiana and Texas to push lawmakers to do something.

“Everything else at the provider’s office looks and feels the same,” said Maureen Hensley-Quinn, senior director of the coverage, cost and value team at the nonprofit National Academy for State Health Policy.

“But [patients] end up with a larger bill for a service they had previously gotten for a lesser amount because the hospital is now treating the provider office as a hospital outpatient department,” she said.

Hensley-Quinn said state lawmakers began relaying their constituents’ complaints to her organization about five years ago, and since then at least 15 states have taken action to address facility fees. Some, including Colorado, Connecticut and New York, have banned facility fees for certain outpatient services at non-hospital locations or for telehealth visits. Those states, as well as others, including Florida, Louisiana, Minnesota and Texas, now require hospitals to notify patients about facility fees ahead of time.

In the most recent legislative sessions, at least 16 bills were introduced in 10 states to address the fees, said Hensley-Quinn.

“It’s big states, small states, it’s very red states, very blue states,” she said. “Legislators across the country are raising these issues and asking questions about what increased consolidation means.”

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