The Hidden Cost of Hospital Facility Fees

Hidden Costs of Hospital Visits

The Hidden Cost of Hospital Facility Fees

Your experience begins with a trip to the doc and ends with your wallet drained.

Physicians working within the network of large hospital systems are amplifying the cost of visits to unsuspecting patients through ‘facility fees’.

Do you recall your last emergency room visit? Aside from the obvious inconvenience of what brought you to the ER, you’ll likely remember receiving two bills following the visit—an invoice for physician’s professional services and a second bill to cover the emergency department facility fee. This practice extends beyond the emergency room and into the primary care practice of physicians working within the chain of corporate healthcare providers.

Facility fees allow healthcare organizations to bill patients a service charge for the use of hospital facilities and equipment. In many instances, patients find themselves responsible for paying the service bill if their insurance provider declines to cover the cost or if the patient has a high-deductible health plan. Hospitals are legally able to charge facility fees if patients visit physicians working within a hospital owned practice.

Facility fees can increase the total cost of a service by three to five times compared to the same service provided by an independent physician.

These costs often also apply to diagnostic services like CT scans, MRIs, ultrasounds, heart scans, stress tests, and lung function tests, performed at hospital facilities. The price of services such as those listed above when performed in a hospital as opposed to an independent facility, can reach from four to ten times higher.

Patients often assume the added costs stem from the use of high-end equipment or an advanced level of physician or radiologist education or experience—this is not the case. The radiologists reading scans at Health One hospitals are the same as those reading scans at Invision.

The difference of cost between services performed in hospitals versus independent physician’s facilities has grown so high that as of March 1st, 2018, Anthem will no longer apply coverage for MRIs and CT scans performed on an outpatient basis (non-emergency) in hospitals nationwide.

When physicians become hospital employees, their fees rise because large hospitals can negotiate higher rates from health plans. Hospitals frequently charge facility fees for care provided in formerly independent physicians’ practices; these can easily double the cost of an outpatient visit. Employed physicians are also expected to use hospital-based diagnostic practices that are more costly than independent facilities.—2014, NY Times

Hospital-employed physicians have more than a few incentives, and while it’s rare to find a physician willing to explicitly state what these incentives are, to the educated patient they become obvious. Some clear incentives to physicians working within the hospital care system include ease of ordering tests through the same hospital computer system and staff familiarity with hospital facilities to order tests in the hospital. The profit from outpatient diagnostic testing is the reason most hospital chains purchase independent physician practices. Physician employment by hospitals grew 49% between 2012 and 2015, and the cost for patients increased by 21% for services performed within hospitals.

More patients are growing aware of the billing practices of corporate healthcare providers and as a result, increasing numbers are turning to independent physicians like First Internal Medicine to provide critical healthcare services. Independent and concierge medical practitioners are not bound by the billing and appointment restrictions of those employed by large healthcare organizations.  This means that not only do patients realize overall cost-savings; they are offered better care and have more access to the physicians of their choice.

As patients become educated surrounding the billing practices of corporate healthcare systems they are increasingly looking for alternatives. At First Internal Medicine, we are that alternative.

Do yourself and your wallet a favor: choose an independent physician and save.

Take control of your health and reach greater heights with First Internal Medicine.