Hospitals Are Adding ‘Facility’ Fees for Routine Care
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Thursday, March 28th. I'm J.R. Whalen for The Wall Street Journal. People often choose to seek medical care at a clinic or outpatient center, as opposed to a hospital, with an eye toward keeping costs down. So imagine their surprise when they open their bill and see fees, often in the hundreds of dollars.
A patient goes to see a physician and finds that they are being billed for hospital overhead. Where people are frustrated is they often don't know that fee is coming.
What are hospital 'facility' fees and why are patients seeing them on routine bills?
Had they known, they could have looked somewhere else for medical care. And they're paying for services that don't really apply to the medical care that they've been receiving.
Wall Street Journal reporter Melanie Evans joins us after the break.
Listen at schwab.com slash washingtonwise.
Hospitals are tacking on billions of dollars in facility fees to unsuspecting patients' bills. Reporter Melanie Evans covers the hospital industry and joins me. Melanie, what types of fees are we talking about and what do they cover?
These are fees that hospitals place on medical bills to cover the cost of their overhead. In a hospital, that makes a lot of sense. So say you're admitted to the ICU. They have expensive equipment. An ICU operates around the clock. There are staff that support the operations of the hospital from janitors and people working in the kitchens to medical assistants. There's regulation that applies to that hospital. And these fees go to offset those expenses.
Are these fees new?
They are not new. They are spreading.
How do hospitals justify facility fees for outpatient clinics and imaging centers?
And this is where patients are being caught off guard. When a hospital acquires an outpatient center, so that could be a clinic, it could be an imaging center, or say they've got an existing clinic but they bring in new physicians to that location, they can expand. Apply the hospital fees to cover the hospital overhead to those locations. So as a patient, you're not admitted to the ICU. You're not inside the hospital. You're going to a clinic and then you're hit with a fee to cover costs of a facility you haven't visited.
About how much are these fees?
They can be hundreds of dollars. In one case, I was looking at some research published last year, the difference between getting a corticosteroid injection for back pain at a doctor's office, not affiliated with a hospital, and a hospital outpatient department was about $1,360.
When did facility fees start spreading from hospitals to affiliated clinics?
That was the addition onto the bill?
That was the difference between those two locations. Same service, different locations.
So you've spoken to patients about this?
Yes.
And people who've gotten bills. I would imagine they're pretty surprised to see these numbers.
They're surprised and they're upset. And the people that I spoke with picked up the phone, started making calls, tried to figure out what was going on. And what they were told was, well, yes, you had a clinic visit, but that clinic is considered a department of the hospital, and therefore, this is the fee you pay. Now, the people that I talked to tried to fight those bills. In one case, one person was successful. In the other cases, they were not.
Did people tell you they thought by going to a clinic and not a big hospital, the cost might be reduced by going that route?
What they did was look at their insurance. And what they understood was that they were going to see a doctor in a clinic. And so they kind of looked at their insurance to sort of understand.
Is the doctor in network and can they go see them?
How large can facility-fee markups be for the same medical service?
Yeah. And what would the cost be? In one case, the case of Rebecca Smith, she had even been going to that clinic for cancer treatment for a couple of years and she wasn't at the point in her treatment where she was visiting the clinic routinely for the same sort of monitoring visit every six months. She went early in 2020 for that visit, and she paid her co-pay for a clinic visit, which was about $70-something.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:52
2
What are hospital 'facility' fees and why are patients seeing them on routine bills?
0:52–2:44
3
How do hospitals justify facility fees for outpatient clinics and imaging centers?
2:44–3:41
4
When did facility fees start spreading from hospitals to affiliated clinics?
3:41–4:46
5
How large can facility-fee markups be for the same medical service?
4:46–5:57
6
What have patients experienced when disputing unexpected facility charges?
5:57–9:38
7
Are hospitals required to disclose facility fees up front to patients?
9:38–10:43
Speakers
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