{"id":35489,"date":"2023-03-01T11:17:33","date_gmt":"2023-03-01T18:17:33","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/colorado-lawmakers-are-targeting-hospital-facility-fees\/"},"modified":"2023-03-01T18:17:33","modified_gmt":"2023-03-01T18:17:33","slug":"colorado-lawmakers-are-targeting-hospital-facility-fees","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/colorado-lawmakers-are-targeting-hospital-facility-fees\/","title":{"rendered":"Colorado lawmakers are targeting hospital facility fees"},"content":{"rendered":"\n

\"Diane
Diane Kruse on Feb. 27, 2023, at her home in Conifer. Kruse\u2019s husband, Kevin, was charged facility fees for multiple cardiology outpatient visits at the National Jewish Health campus in Denver in spring 2022. Facility fees, charges that hospitals apply that can help pay for overhead costs, can come as a surprise to patients who aren\u2019t notified of their amounts. (Olivia Sun\/The Colorado Sun via Report for America)<\/span><\/figcaption><\/figure>\n<\/p>

Last year, Diane Kruse and her husband, Kevin, went to visit the doctor.<\/p>\n

Kevin needed to get some things checked out with his heart, nothing urgent or out of the ordinary. After looking through their insurance network, they settled on a cardiologist working at a satellite clinic on the National Jewish Health campus in Denver. The visit felt routine \u2013 the only piece of equipment the doctor needed to use was a stethoscope.<\/p>\n

But the bills came as a surprise.<\/p>\n

They had been prepared to pay a $150 copay to cover the office visit. But they also received a second bill for another $150 for \u201cfacility and nursing services,\u201d the billing statement said.<\/p>\n

Confused, Diane called the National Jewish billing department, thinking she had been mistakenly double-billed.<\/p>\n

\u201cThe person checked it out and said, \u2018That\u2019s the hospital,\u2019\u201d Diane said. \u201cAnd I said, \u2018We didn\u2019t go to a hospital.\u2019 And they said, \u2018Well, that\u2019s the facility fee.\u2019\u201d<\/p>\n

What exactly was going on in Diane and Kevin Kruse\u2019s medical bills \u2013 what they were charged and why \u2013 is now the subject of the biggest health care fight at the state Capitol this legislative session.<\/p>\n

Targeting facility fees<\/div>\n

The issue has to do with facility fees, charges that hospitals bill to insurers and patients to cover their own costs of providing care, separate from what a doctor gets paid. To consumer advocates, these fees too often seem like predatory add-on charges meant to enhance the hospital\u2019s bottom line at the expense of the patient\u2019s pocketbook. Hospitals say these fees are vital sources of revenue \u2013 often the only way they can get paid to keep nurses employed, the lights on and the floors clean at the clinic.<\/p>\n

The practice of charging facility fees has proliferated in recent years \u2013 both in Colorado and nationally \u2013 as hospitals acquire once-independent doctor\u2019s offices, open their own off-campus clinics and increasingly encourage patients to receive treatment in outpatient settings.<\/p>\n

But this has created confusion and frustration for patients. Doctor\u2019s visits that used to come with only one charge now come with two. And the facility fee can also hide in bills, often not being labeled even as clearly as it was in the Kruses\u2019 bills.<\/p>\n

Now, Democrats at the state legislature have introduced a proposal to ban hospitals from charging facility fees in most outpatient circumstances. The legislation, House Bill 1215<\/a>, would prohibit facility fees for outpatient visits at clinics and offices that are not on a hospital\u2019s main campus. It would also prohibit hospitals from charging facility fees for outpatient services at on-campus locations, such as in the hospital, if the state Medical Services Board<\/a> rules that the service could have been provided safely at an off-campus location.<\/p>\n

\u201cFacility fees are simply another way that hospital CEOs are lining their pockets at the expense of patients, and we simply can\u2019t let this continue,\u201d state Rep. Emily Sirota, D-Denver, said in a statement after the bill was introduced last month.<\/p>\n

\"Visiting
Visiting Siemens engineers Larry Wright, right, and Michael Szabo take part of a routine maintenance of a CT-scan machine inside the Memorial Regional Health hospital Feb. 2, 2023, in Craig. (Hugh Carey\/The Colorado Sun)<\/span><\/figcaption><\/figure>\n<\/p>

That\u2019s one version of what the bill would do: reduce runaway health care costs for patients while not really harming hospitals\u2019 ability to provide needed care.<\/p>\n

Hospitals, of course, see it differently. They estimate the financial hit to hospitals statewide would be $9 billion, and they warn that could result in hospitals closing outpatient clinics and shifting more people to costlier inpatient care, while pushing some rural health systems to the brink of insolvency.<\/p>\n

\u201cThis proposal is so incredibly vast and all-encompassing, it\u2019s just completely disconnected from the way things really work,\u201d said Zach Zaslow, the interim vice president of population health and advocacy at Children\u2019s Hospital Colorado.<\/p>\n

Finding the truth in the rhetoric<\/div>\n

These two versions of the story can\u2019t both be true. So, which one is?<\/p>\n

Glen Mays, an expert on health systems at the Colorado School of Public Health, says both stories contain a bit of truth. Undeniably, facility fees are being charged more often in more places, he said. And those fees increase the overall cost of health care.<\/p>\n

But hospitals also have come to depend on facility fees. If they lose much of that revenue and can\u2019t replace it by increasing charges elsewhere, they could be in a real bind.<\/p>\n

\u201cThe question would be: What is the magnitude of that kind of impact?\u201d Mays said.<\/p>\n

To understand the potential magnitude, it helps to know what goes into a medical bill. Hospitals \u2013 and their affiliated clinics \u2013 can charge for the drugs they administer or the equipment they use. But a bill is generally made up of two big fees.<\/p>\n

The first is what is called the professional fee. This is the money that goes to the doctor, and in the past it was likely the only major charge that patients saw. You had an earache, you went to your local, independent doctor\u2019s office and the doctor charged you a professional fee for the treatment visit. That fee covered the entire cost of care \u2013 from the doctor\u2019s salary all the way down to the clinic\u2019s trash bill.<\/p>\n

\"The
The emergency room entrance to Saint Joseph Hospital in Denver, photographed on Oct. 22, 2019. (John Ingold\/The Colorado Sun)<\/span><\/figcaption><\/figure>\n<\/p>

But hospitals were in a unique spot: Especially in places like their emergency departments, hospitals needed to be fully staffed and ready to go even when patients weren\u2019t coming in. Thus was born the facility fee, something that hospitals could charge patients to help fund the facility\u2019s operations, and it\u2019s been around for decades.<\/p>\n

\u201cIt\u2019s a distortion in payment that\u2019s been baked into Medicare and it\u2019s been baked into a lot of private health insurance plans,\u201d Mays said.<\/p>\n

As hospitals have bought up outpatient clinics \u2013 or opened their own \u2013 facility fees have begun popping up on bills in more places, even on things like telehealth visits<\/a> where a patient doesn\u2019t leave their own home for care. Citing Medicare data, Mays said professional fees charged at a clinic often decrease when the clinic becomes affiliated with a hospital system. But, with a facility fee added on, the overall cost of care goes up, putting more burden on insurers and patients.<\/p>\n

\u201cThe combined fee is higher than a single fee,\u201d Mays said.<\/p>\n

So, for proponents of the new legislation, this suggests a tidy solution: If facility fees are banned in most outpatient settings, hospitals will switch to recouping their expenses through the professional fee and the entire charge will be less than what it was when facility fees were being charged.<\/p>\n

\u201cWe see that these facility fees do not always connect to the cost of care in any understandable way,\u201d said Isabel Cruz, the policy manager for the Colorado Consumer Health Initiative, which supports the bill. \u201cAnd our understanding is that the professional fee does reimburse them for costs.\u201d<\/p>\n

But what happens if the answer isn\u2019t so tidy?<\/p>\n

When hospitals don\u2019t employ doctors<\/div>\n

Children\u2019s Hospital Colorado is one of the U.S. West\u2019s premier pediatric health systems. But, despite expecting nearly 1 million patient visits this year, Children\u2019s employs almost no doctors.<\/p>\n

Instead, nearly 98% of the physicians who work at the hospital are employed by CU Medicine, an arm of the University of Colorado School of Medicine. What this means from a billing perspective is that CU Medicine charges the professional fee, not Children\u2019s.<\/p>\n

\u201cChildren\u2019s Hospital Colorado does not and cannot benefit from this fee,\u201d Dr. David Brumbaugh, Children\u2019s chief medical officer, wrote in an email.<\/p>\n

The hospital also does not charge its physicians for the use of its facilities. That means, according to the hospital, that the facility fee is the only way for Children\u2019s to get paid for the care its nurses and therapists provide, for its administrative staff, for its child life specialists who make the hospital a less-scary place for young patients.<\/p>\n

Roughly 98% of the care that the hospital provides is outpatient \u2013 part of a concerted effort by hospitals across the state and country to move patients from costlier inpatient settings into more efficient and accessible outpatient ones.<\/p>\n

\u201cIt\u2019s a misguided approach that will only intensify access-to-care challenges,\u201d Zaslow said.<\/p>\n

\u201cThis thing comes out of nowhere at you.\u201d<\/div>\n

Kruse said she and her husband did all the due diligence they could to avoid an unexpected medical bill. But facility fees often hide under other names.<\/p>\n

\u201cIf you go online, they roll the facility fee into something that looks like it\u2019s doctors care,\u201d she said.<\/p>\n

This only adds to the confusion when patients receive a separate charge or bill for the professional fee.<\/p>\n

As an example, look at UCHealth. The giant health system, Colorado\u2019s largest, posts price lists online for all the services it offers, in compliance with federal rules. If you are insured through Anthem, for instance, and you get an outpatient colonoscopy at the University of Colorado Hospital, the price list says the charge will be $2,394.76.<\/p>\n

Except, that\u2019s not the full price. It\u2019s just the facility fee \u2013 even though it\u2019s not labeled as such. The cost for the doctor and potentially other services, like anesthesia, will be more.<\/p>\n

This confusion shows up again and again in patient stories. A dad in Colorado Springs who thought he was only going to be charged $238 professional fee for a brain scan for his son was shocked when a $2,518 facility fee bill later arrived.<\/p>\n

\u201cThere\u2019s nothing you can call it besides a surprise bill,\u201d he told Fox 31, which investigated the bill and was told that it was ultimately reduced.<\/p>\n

When Kruse realized there was a difference between the doctor\u2019s fee and the facility fee for her husband\u2019s cardiology visits at National Jewish, she was upset. Why hadn\u2019t anyone explained this to her?<\/p>\n

\u201cThey said you have to ask about it,\u201d she said. \u201cHow do you ask about something you don\u2019t know exists?\u201d<\/p>\n

\u201cThis thing comes out of nowhere at you.\u201d<\/p>\n

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com<\/em><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

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