How to avoid unexpected 'facility fees'

how-avoid-unexpected-facility-fees Thursday, November 15, 2012

In case you missed it, take time to read a Seattle Times story about why some patients are being charged an extra fee, known as a "facility fee," for a routine doctor visit. The article provides valuable information about why some patients are receiving two separate bills for one visit to the doctor.

We know that receiving unexpected charges for healthcare is never pleasant, so it's important to understand this issue.

What is a facility fee?

  • A facility fee is not for medical care. It is an additional fee billed by a hospital system to cover the bricks and mortar overhead, incurred during a visit with a physician practicing at a hospital-owned clinic.
  • The additional cost for facility fees is becoming a source of complaints across America. Many patients say they feel blindsided and some are filing lawsuits and contacting legislators for intervention. Washington State recently passed a law requiring full disclosure of these fees to patients.

If the patient stays off the hospital campus, are they safe from these fees?

  • Geographic location has nothing to do with these charges. They are related to the practices that hospitals establish when they create business relationships with medical professionals who provide them with services.

Why is this happening?

  • A Medicare regulation instituted 10 years ago allows separate billing of hospital fees and normal patient care fees known as "provider based billing." It allows hospitals that own physician practices and outpatient clinics that meet certain federal requirements to bill separately for the facility as well as the physician services. Because hospitals bill Medicare this way they must do so for all other patients, therefore facility fees impact patients of all ages. However, offices owned by physicians and freestanding clinics are not allowed to bill facility fees.

How does Premera cover facility fees?

  • Many Premera health plans cover hospital facility fees, although they are typically subject to a member's deductible and co-insurance. Call Customer Service to find out whether a medical provider you plan to use will charge a facility fee, and what your cost share might be.

We believe it is important that our members are involved in decisions surrounding when and where they receive care, regardless of whether a facility fee is involved. We want to make sure our members are equipped to ask the right questions and make informed decisions. We also feel strongly that doctors should take an active role in notifying patients if there is a facility fee associated with an office visit.