More than ever before, patients want to know the charges associated with their care, as they take on a greater share of their healthcare costs with higher deductibles and co-pays.
One expense that is increasingly popping up is a facility fee, which occurs under a provider-based billing model, according to an Associated Press report published by the Reading Eagle.
When provider-based billing is used, hospitals can charge patients a fee for use of the building at which a patient is seen. The charge is separate from the fee for the physician's professional services. Hospitals can charge patients a facility fee if they see physicians who work in an office that is owned by the hospital. However, freestanding clinics and independently owned physician offices cannot charge a facility fee.
Here are seven things to know about provider-based billing.
1. Facility fees, allowed by Medicare since 2000, have become increasingly common as more physician practices are sold to hospitals, according to the report. The report cites a 2013 analysis by management consulting firm Accenture, which shows hospital systems were projected to own 57 percent of physician practices by the end of 2016.
2. There is not a specific agency that keeps tabs on how many hospitals nationwide charge facility fees or how much revenue they generate, according to the report. But the Associated Press does point out several hospital systems in Northeast Pennsylvania that engage in provider-based billing, including Danville-based Geisinger Health System; Coordinated Health, which specializes in muscular and skeletal medicine and has locations throughout Pennsylvania and New Jersey; Allentown, Pa.-based Lehigh Valley Health Network; and Wayne Memorial Hospital in Honesdale.
3. Facility fees remain controversial. Critics contend the fees are a way for hospitals to generate extra revenue with no additional benefit to patients, according to the report. However, the Associated Press notes, hospital officials argue the fees are justified because most provider-based facilities offer more comprehensive services, including laboratories, X-rays and pharmacies, which are more costly to operate.
4. Facility fees have also been a hot legal topic. In 2013, Pennsylvania Rep. Dan Frankel (D-Pittsburgh) introduced legislation that would, among other things, require providers to notify patients when they make appointments that a facility fee would be charged. The legislation would also require providers to tell patients about facilities in their system that do not charge facility fees, according to the report. The bill never made it out of the House health committee, however. Rep. Frankel told the Associated Press he plans to re-introduce it this year.
5. The practice has also spurred federal regulators to examine the procedures in place for hospital service charges and pricing transparency, reports The Plain Dealer. Federal regulators, concerned with rising care costs and consumer complaints, plan to review the impacts of provider-based billing this year.
6. Additionally, a new law in Connecticut, which went into effect Jan. 1, requires all hospitals and health systems that acquire a physician group and plan to implement a facility fee to notify the practice's patients from the previous three years.
7. And last year, President Barack Obama signed legislation outlawing provider-based billing at off-campus outpatient facilities However off-campus facilities that existed at the time the legislation enacted are exempt from the law.
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