The Tamesis
Patients who visit hospital-owned doctors’ offices may find something that may make them uncomfortable: unexpected “facility fees” that have nothing to do with the care they receive.
These fees, which range from $25 to thousands of dollars, often appear on patients’ medical bills after annual physicals, strep throat tests or telemedicine appointments, according to a report by PIRG USA.
The facility fee is designed to help hospitals offset high overhead costs, including overnight care, use of specialized equipment and other expenses that make hospital operations costly. However, when hospitals acquire independent physician practices that do not face hospital-scale expenses, patients may still be affected by those expenses, even in an outpatient setting.
“The administrative fees they were charged were completely unrelated to the care they received,” the US PIRG said in the report.
For patients, facility fees drive up medical costs and even deter some seeking carea nonprofit consumer advocacy group found.
“We don’t want to pay hospital fees for services that we never go to the hospital for,” Patricia Kelmar, senior director of health care activities for U.S. PIRG and one of the report’s authors, told CBS News. “That drives up prices and causes people to be hesitant to get regular treatments and checkups.”
Facility fees, which first appeared in 2023, have become more common as hospitals acquire more independent physician practices. According to the US PIRG, about 50% of community clinics are owned by hospitals, making it impossible for many consumers to avoid such costs.
“Patients have annual physicals or follow-up visits because the doctor they’ve been seeing for years is now owned by a hospital that takes over the billing, so it can charge a facility fee,” Kelma said.
Adding to patients’ frustration, only a handful of states require hospitals to notify them in advance of additional charges.
“People don’t know before they go, or they see a sign at the doctor’s office after hours and hire a sitter that says, ‘This place may charge a facility fee,’ but it’s not worth a dollar,” Kelma said. “Advance notice is not helpful. By then, it’s too late.”
“We never received notification”
Beth Davis of Mentor, Ohio, described her shock and confusion at receiving a four-digit facility fee. She told CBS News that she went to a doctor’s office at a local hospital to seek treatment for carpal tunnel syndrome, a condition that causes pain in her wrists. She received a cortisone injection and a second one a month later.
The cost for the second shot totaled $2,667.45, according to a copy of Davis’ explanation of benefits to insurance companies seen by CBS News. Her bill describes the facility fee as “auxiliary facilities and observation room” charges, totaling $2,418. The “clinic” fee is $156 and the “pharmacy” fee is $93.45.
“I wasn’t even observed. The doctor came in and gave me the shot — not even an assistant,” Davis told CBS News.
Her insurance company covered about $1,000 in medical bills and she was required to pay $1,618, which David said she refused to pay because she believed it was unreasonable.
“I didn’t even know such a thing existed. We were never informed of this allegation,” she said.
Stricter rules are needed
In 21 states, consumers enjoy at least some protection from facility fees. Nine of those states prohibit such fees in outpatient facilities, but only for certain types of care. Thirteen states require health care providers to notify patients of the application of such fees.
But Kelma believes existing regulations do not go far enough to protect consumers from unexpected costs.
“This will only undermine the entire system. We must eliminate facility fees, encourage more states to collect data, and require more hospitals to report what providers charge,” she said. “We need some level of reporting. People need to know.”
Two-thirds of Americans say they are Very or somewhat worried A recent poll from health policy research firm KFF shows people are more worried about paying for health care than they are about paying for groceries, utilities or housing. Of those, one-third said they were very worried about paying their medical bills.
