One of the ways hospitals are generating more revenue is through ownership of doctors’ practices, outpatient surgical clinics and diagnostic centers. Hospitals can charge far higher fees for care you receive at these hospital-owned providers, even though they have no evident tie to the hospitals. You literally can save thousands of dollars on an outpatient service by seeing physicians who are not part of a hospital system; Medicare could save billions by paying outpatient facilities the same rate as independent facilities.
What’s going on? Hospitals are permitted to add a “hospital facility fee,” to your doctors’ charges or the charges at an outpatient facility that they own. The hospitals consider these facilities “outpatient hospital departments.” And, the charges can be $154.52 for a visit to the doctor to get a flu test or $15,000 for some services at some hospitals, reports Jessica Glenza for The Guardian.
United States of Care, a non-profit organization, just released a report, Behind the Bill, on these hospital upcharges. It’s one way that consolidation in the health care sector is driving up costs.
The American Hospital Association (AHA) supports facility fees and has helped to ensure they remain part of a patient’s bill at an outpatient facility owned by a hospital. The AHA argues that hospitals have a lot of unfunded costs, such as emergency room care they provide, regardless of whether patients are insured. The facility fee helps offset these costs.
As recently as two years ago, more than four in ten doctors were connected with a hospital. A decade earlier, three in ten doctors had hospital ties. Charges for physician services keep rising. One researcher found that hospitals charge 150% more for the same outpatient services as ambulatory surgical centers in the same region that are not hospital-owned.
Another study found that when a physician group merged its practice with a hospital, charges increased 14.1 percent on average. But, don’t think you can predict them; no one discloses them. They depend entirely on the hospital adding them to the bill and bear no relation to the cost of a service.
Medicare payment policy has fueled hospitals’ purchase of outpatient facilities. Medicare pays the same price for a service performed in hospital as in an outpatient facility owned by a hospital, even though the outpatient facility service should cost a lot less. Though some in Congress want to address this issue, nothing has been done to date.
The AHA blames insurers for health care cost increases. But, hospitals are also responsible. Politics clearly has kept Medicare from adjusting its payments for outpatient services at facilities owned by hospitals down to the same level as it pays for outpatient services at facilities that are independent.
Here’s more from Just Care:
- Want surgery? Some hospitals make you pay upfront
- Hospitals delay care for older adults in ERs, causing them needless harm
- Half of rural hospitals are losing money, closing units
- Hospital billing practices frequently leave people without medical care or in court
- If you’re in a Medicare Advantage plan, watch out! Your doctor or hospital might no longer be in-network