“Think of going to the grocery store to buy your milk and being charged a facility fee because you entered the store….When you can get access to this information in advance of care and upfront, you wouldn’t tolerate it. You’d go to a doctor’s practice that’s not going to charge you a facilities fee.” – Cynthia Fisher, Founder of Patient Rights Advocate
Public Eye: Sticker shock at the doctor’s office — Why do hospitals charge ‘facility fees?’
Story by Dale Denwalt, The Oklahoman
John Penn expected a doctor bill when he went to the McAlester Regional Health Center, but he was shocked by what came with it — a separate $193 charge for the room.
He asked the doctor: “Next time can we meet in the parking lot?”
Penn reached out to Public Eye to tell his story, hoping others who read it can prepare themselves for unexpected medical charges under similar circumstances. The hospital’s room charge nearly doubled his bill for what was essentially a checkup.
The problem: medical charges you don’t expect
Penn said he recalled seeing a handwritten sign in the office warning that patients might receive another bill separate from their physician.
“They need far better disclosure than putting a pencil-written note taped to an admissions window,” he said.
Facility fees are nothing new. But as the health care industry becomes more centralized and hospitals buy up clinics in the area, there are more chances for a patient to find themselves in this situation.
“Think of going to the grocery store to buy your milk and being charged a facility fee because you entered the store,” said Cynthia Fisher, founder and chairwoman of PatientRightsAdvocate.org, a nonprofit organization seeking healthcare price transparency and creation of a functional health care marketplace. “When you can get access to this information in advance of care and upfront, you wouldn’t tolerate it. You’d go to a doctor’s practice that’s not going to charge you a facilities fee.
Independent doctor’s offices and clinics aren’t allowed to charge a separate facility fee, but hospitals can. If your doctor uses a hospital-owned exam room to see you, the hospital might send you their own bill.
Facility charges are increasing at a faster pace than other services, too. An analysis of emergency department evaluation and management services by KFF, formerly known as the Kaiser Family Foundation, showed that facility fees increased four times faster (531%) than professional fees (132%) between 2004 and 2021.
What we found: A common practice
When asked about its policy on facility fees, MRHC Foundation Executive Director Chris Plunkett pointed to a memo outlining the hospital’s “provider-based billing” practices. According to the memo, MRHC splits charges for patients who visit a clinic but not necessarily are admitted into the hospital. Doing so “is the national model of practice for health care networks” like MRHC.
“One charge will be a professional fee (clinic charge), and the other will be a technical fee (hospital charge). The combined total charge is the same, but the components are split,” the memo states.
It gets even more complicated because some health insurance plans treat the charges differently. Depending on your coverage plan, your insurer might not cover facility charges.