Can the US healthcare system learn something about how to operate from car dealerships? Lawrence Kosinski, MD, MBA, a governing board member of American Gastroenterological Association (AGA), believes so.
There’s growing concern in the United States about the lack of clarity surrounding facility fees, which are intended to cover costs of maintaining medical facilities. Dr. Kosinski thinks that Congress should look into the transparency mandate it created for car prices as a model for how to address this.
A 1958 federal law set the stage for the consumer-friendly breakdown of costs and relevant performance data that anyone who has bought a new vehicle in the United States would recognize.
“You look at that and you know exactly what you are paying for,” Dr. Kosinski told this news organization. “In healthcare, we need something like that.”
Novel solutions like Dr. Kosinski’s will be increasingly necessary, as lawmakers on the state and federal level have begun to set their sights on tackling this issue.
The Biden administration in July expressed concern about an increased use of facility fees for healthcare provided at doctors’ offices, saying these additional costs often surprise consumers. House Energy and Commerce Chairwoman Cathy McMorris Rodgers (R-WA) also raised this issue several times this year, including at a May meeting about pending legislation on price transparency for health services, where she mentioned the case of a man who underwent eye surgery in Maine.
“His bill included three separate facility fees totaling $7800 and professional fees totaling $6200,” Ms. Rodgers said. “Why are three facility fees necessary for 1 hour of surgery in one O.R.?”
AGA’s Dr. Kosinski said facility fees cover the additional costs hospitals and clinics face in providing even routine treatments for some patients. For example, colonoscopy for a patient with a body mass index of 50 would pose special challenges for the anesthesiologist.
These factors need to be considered in setting policies on facility fees, he said. But there is no reason hospitals and other sites of medical care can’t make the information about facility fees easy for patients to find and understand, Dr. Kosinski said.
“I’m struggling to see a reason why we can’t be more transparent,” he said.
Big Battles Ahead
There are two connected battles ahead regarding facility fees: Efforts to restrict these additional charges for many medical services and fights over the need for greater transparency in general about health costs.
Senate Health, Education, Labor and Pensions Chairman Bernie Sanders (I-VT) is seeking to broadly restrict facility fees through his pending Primary Care and Health Workforce Act (S. 2840). The measure would block hospitals from charging health plans facility fees for many evaluation, management, and telehealth services.
The American Hospital Association (AHA) opposes it. They argue that the current payment approach rightly accounts for the added costs incurred when hospitals treat patients who are more likely to be ill or have chronic conditions than those seen in independent practices.
AHA said hospitals also need to maintain standby capacity for natural and man-made disasters, public health emergencies, and unexpected traumatic events. In September, AHA launched a television ad campaign to oppose any drive toward site-neutral policies. AHA says reducing the extra payments could cause more hospitals to shut their doors.
But there’s persistent interest in site-neutral payment, the term describing when the same reimbursement is given for care regardless of setting. This would lower pay for hospitals.
Among those pressing for change is an umbrella group of medical organizations known as the Alliance for Site Neutral Payment Reform. Its members include the American Academy of Family Physicians, American Academy of Orthopaedic Surgeons, American College of Physicians, Community Oncology Alliance, and Digestive Health Physicians Association.
And on November 9, Sen. Maggie Hassan (D-NH) argued for eventually including a site-neutral Medicare provision to a major healthcare package that the Senate Finance Committee is putting together.
Sen. Hassan is seeking to end what she called the “the practice of charging patients unfair hospital facility fees for care provided in the off-campus outpatient setting, like at a regular doctor’s office.”
Senate Finance Chairman Ron Wyden (D-OR) and the ranking Republican on the committee, Sen. Mike Crapo (R-ID), told Sen. Hassan they intended to work with her to see if this issue could be addressed in the pending legislative package.
A 2015 budget deal marked the last time Congress took a major step to address the higher cost of services provided in hospital-owned facilities.
Lawmakers then were scrambling to find cuts to offset spending in what became the 2015 Bipartisan Budget Act. This law established site-neutral payments under Medicare for services received at off-campus outpatient departments but exempted hospitals that already ran these kinds of operations or had advanced plans to create them.
Lawmakers are well aware of the potential savings from site-neutral policies and could look in time again to use them as part of a future budget deal.
In fact, in June, Sen. Hassan and Sens. Mike Braun (R-IN) and John Kennedy (R-LA) introduced a bill meant to basically end the exemption given in the 2015 deal to existing hospital outpatient departments, which has allowed higher Medicare payments. In a press release, Braun estimated that their proposed site-neutral change could save taxpayers $40 billion over a decade.