Facility Fees For Office Visits: What is the Role of Health Plans?

March 13, 2013
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Yesterday’s Boston Globe article (Hospital charges bring a backlash) was spot on. Reporter Liz Kowalczyk nailed the topic:

Yesterday’s Boston Globe article (Hospital charges bring a backlash) was spot on. Reporter Liz Kowalczyk nailed the topic:

  • Hospitals are adding facility fees in the hundreds of dollars for many visits to hospital-owned physician practices, even when those practices are nowhere near the hospital
  • Facility fees are becoming more common as hospitals purchase formerly independent physician practices and tack on the fees
  • Patients are pushing back. One reason is that more of them have high deductible plans that force the patient to bear more of the cost
  • Insurance companies are aware of the issue but have generally been allowing the fees

I’ve been following this topic for some time, and for me the last two bullet points are the intriguing ones. In December (Facility fees for hospital-owned physician offices: A nasty surprise for patients) I wrote:

In general health plans and self-insured employers have just put up with the high charges or haven’t made it a priority. The biggest difference now is that patients are being exposed to the facility fees and finding that they owe much more after a test than they used to. So while hospitals used to shrug their shoulders at the issue in the past, they find it a little harder now.

This situation presents health plans with an opportunity to demonstrate what value they can add. Health plans should have identified this issue earlier and taken more vigorous steps to oppose it than they have, but many lack the data and analytic tools to pinpoint the shift, some may be in a weak negotiating position relative to the major hospital systems, or may have accepted the facility fees in exchange for other concessions.

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Now that consumers have identified the issue and the Globe has focused attention on it, I’ll be interested to see what health plans do. If they don’t take steps it will call into question the value they bring to their customers and will invite intervention from the state.