As Debate Continues, States Are Moving Ahead With Changes
Consumer activists have won a few battles this year at the state level about facility fees.
In July, Maine Gov. Janet Mills, a Democrat, signed a law that requires medical organizations to report facility fees to the state, which will share them publicly. Facility fees can pop up after a patient has received an insurance company estimate of the out-of-pocket costs for care.
“Patients receive bills bloated by healthcare providers that overcharge for services and insurance companies that deny claims without explanation,” the Portland Press Herald reported in a 2022 story. “And with little clout to fight back or even negotiate, feeling helpless, they often give up and pay, worn down by a system that is as time-consuming as it is obtuse.”
In May, Colorado enacted a law that will require patient notification about facility fees at many hospitals in the state.
In June, Connecticut expanded its law regarding facility fees and prohibited them for certain routine outpatient healthcare services. A statement from Gov. Ned Lamont’s office said the original intent of these facility fees was to ensure hospitals could maintain the around-the-clock care needed for inpatient and emergency care.
“However, these fees have been increasingly applied to services such as diagnostic testing and other routine services,” the statement said.
But there have been setbacks as well for those seeking to curb facilities.
The Texas Hospital Association (THA) in May said its advocacy defeated a pair of state bills, House bill 1692 and Senate bill 1275, that sought to limit facility fees for outpatient services.
In rallying opposition to these bills, THA said the loss of facility fees would threaten care for patients. Facility fees help cover costs “beyond the doctor’s bill,” such as “lab technicians, interpreters, medical records, security personnel, janitorial staff, and others,” THA said.
More Patients Shopping?
It’s unclear when — or if — Congress and other states will take major steps to reduce additional payments to hospitals for outpatient care.
But the increased use of high deductibles in health plans is driving more consumers to try to understand all of the costs of medical procedures ahead of time and, thus, drawing attention to facility fees, said Charlie Byrge, the chief operating officer of MDsave.
The average annual deductible levels for an individual increased by 3.0% to $2004 from 2020 to 2021 and for a family plan by 3.9% to $3868, according to a federal report. Some people have higher deductibles, exceeding $5000, Mr. Byrge said.
“That’s creating an opportunity for firms that can connect physicians directly with patients who will pay part or all of the costs of a treatment out of pocket,” he told this news organization.
Doctors and hospitals work with MDsave to charge preset prices for certain services, such as colonoscopies and mammograms. Consumers then can shop online to see if they can save. For example, in Nashville, Tennessee, where MDsave is based, the cost of a colonoscopy through MDsave is $2334, about half of the $4714 national average, according to the firm’s website.
This model for pricing routine medical care is akin to those used for other products and services, where companies decide ahead of time what to charge, he said.
“You don’t buy an airline ticket from Southwest or United or Delta and then there’s a bill after the fact because the price of gas went up a little bit on your flight,” Mr. Byrge said.
This will drive more competition among hospitals and clinics, in places where there are several sites of care in a region, Mr. Byrge said. But there are advantages for physicians and hospitals from the MDsave approach, he said.
“They know they’re getting paid upfront. They’re not going through the delays and headaches of the insurance reimbursement process. There are no denials. It’s just an upfront payment, and I think that’s what we’re starting to see the market really moving toward,” he said.
A version of this article appeared on Medscape.com.