Patients are often unaware that they will be charged hospital “facility fees” until they get their bill after their visit to a doctors’ office or clinic that is owned by a hospital. That may be changing soon in Kansas, thanks to SB 122, the Facility Fee Transparency proposed law, now in the Public Health and Welfare committee of the Kansas Senate. Passage of this proposed legislation into law, hopefully next year, will be a great step forward in health care transparency, particularly important now that so many people have high deductible insurance, and are having to pay these fees out of pocket.
One of the most profound changes in healthcare in the past few years is the mass employment of doctors by hospitals, so that many doctors who used to be in private practice are now employees of hospitals or hospital systems, with a commensurate loss of control of how they take care of patients. More important for the cost of medical care, for both patients and payers like insurance companies and the government, is that these employed doctors’ billing is now done through the hospital payment system and no longer through the payment system for private practice physicians. And payments for physician services, including outpatient visits, are much higher in the hospital payment system than in the private practice payment system. The effect of this is that patients are billed as much as twice as much for the same visit to the same physician as they were billed before his or her practice was bought out by the hospital. And a large component of that higher bill is the “facility fee” that is tacked on to every service provided in a hospital owned office or testing facility, even if it is the very same facility that used to be a private doctors’ office.
It is unfortunate that in most cases, patients do not realize that they are going to be charged this extra fee until they get the bill after they have already received the service. But this may change soon in Kansas. Senate Bill 122, the Facility Fee Transparency proposed law, was introduced this year in the Public Health and Welfare committee of the Kansas Senate. This proposed law would require hospital owned offices to inform patients in advance of their visit of the following: they are hospital owned, they may charge a facility fee, and such a fee would not be charged in a non- hospital owned office. The committee held one hearing but they failed to act this year. This proposed law is very similar to legislation that is already law in Connecticut and is being considered in several other states.
Dr. Elizabeth Rowe of the RNI testified at the committee hearing in support of the proposed law. Her testimony and handout for the committee, which includes a report from the Connecticut Attorney General presenting the issue in detail, is available here. Then last month, two patients went to the news media to complain about facility fee bills that they had received involving two different clinics and hospitals here in Kansas City. Two TV stations talked about these cases in their news programs, on May 12 and May 14, and another one on May 18. Dr. Rowe was interviewed about the Kansas proposed law in two of them. In both cases, the reporters said that no hospital was willing to be quoted on the subject of facility fees.
The proposed law was not acted on in committee this year, but is still there and is expected to be discussed in next years’ session. By then, we hope to have time to find patients and doctors willing to testify about their experience with unexpected charges from hospital owned doctors offices, clinics and testing facilities. This law will be a great step forward in creating transparency in health costs. This is particularly important now that so many people have high deductibles, and are being expected to pay these extra fees out of pocket.
