·  Legal News, Analysis, & Commentary

Health & Medicine

The Rise of Hospital Facility Fees & Their Impact on Patients

— June 25, 2024

Large fees burden patients with unexpected charges, impacting affordability and transparency in healthcare.

In the complex world of healthcare billing, a relatively unknown but significant charge is causing concern among patients and advocacy groups alike. Hospital facility fees, a charge added to bills from doctor’s offices, outpatient surgical clinics, and diagnostic centers owned by hospitals, are under scrutiny for their impact on patients’ wallets. Even if a patient never sets foot on a hospital campus, they may find themselves facing these fees, often without warning or explanation.

The United States of Care, a non-profit advocacy group, recently released a report titled “Behind the Bill,” shedding light on the prevalence and impact of hospital facility fees. According to Liz Hagan, the group’s director of policy solutions, this practice represents one of the most egregious examples of hospital financing at the expense of consumers.

The core issue stems from hospitals rebranding these facilities as “outpatient hospital departments,” allowing them to tack on facility fees. This can lead to significant price hikes for patients, affecting their out-of-pocket costs and potentially driving up insurance premiums. And this is being done without obtaining informed consent from patients, meaning the lack of transparency makes it very difficult for patients to anticipate or contest them. Moreover, being unaware of the large fees can make it challenging for patients to understand their bills or compare costs between different providers. For example, they may be unaware that a clinic or doctor’s office they visit is considered an “outpatient hospital department,” and may have opted to seek care at another location or with an alternate provider.

The Rise of Hospital Facility Fees & Their Impact on Patients
Photo by Antoni Shkraba from Pexels

The American Hospital Association (AHA) and other trade groups contend that facility fees are essential for hospitals to maintain the readiness required for emergencies and to ensure continuous, 24/7 care availability. These fees, they argue, cover the costs associated with having medical staff, equipment, and facilities on standby, ready to respond to any medical crisis that may arise.

According to the AHA, prohibiting facility fees would have severe consequences for hospitals, potentially leading to significant budget cuts. These cuts could have a cascading effect, impacting hospitals’ ability to provide essential services to their communities. The AHA argues that without facility fees, hospitals would struggle to maintain the same level of readiness and may even be forced to reduce services or close facilities, particularly in underserved areas.

Additionally, the AHA emphasized that hospitals play a vital role in providing care to all individuals, regardless of their ability to pay or insurance status. This commitment to providing care to all, coupled with other costs, underscores the necessity of facility fees.

However, critics argue that the growing popularity of charging extra fees is closely tied to the increasing consolidation in healthcare. As hospitals acquire more doctor’s offices and clinics, they gain leverage to demand higher payments from insurance companies. This, in turn, can lead to higher costs for patients and insurers alike.

The issue has caught the attention of bipartisan state lawmakers, with calls for reforms to address the growing affordability burden faced by patients. However, despite these efforts, Congress has yet to implement widespread changes to address the issue. As patients continue to grapple with rising costs, addressing all fees included on their bills is crucial to ensuring access to affordable and equitable healthcare for all.


US patients charged for ‘hospital facility fees’ – even if they don’t set foot in one

Biden targets hefty hospital ‘facility fees’ that often surprise patients

Hospitals may face tougher penalties for hiding their prices

Join the conversation!