STOCK MARKET WATCH -- Wednesday, 26 December 2012

[Demeter]

7. Hospital ‘Facility Fees’ Boosting Medical Bills, and Not Just For Hospital Care By Fred Schulte

http://www.nationofchange.org/hospital-facility-fees-boosting-medical-bills-and-not-just-hospital-care-1356362401

After Vermont hospitals started buying up the medical practices of local physicians, state Sen. Kevin Mullin of Rutland, began hearing complaints that prices some patients were paying for routine medical care had soared. One family accustomed to paying about $120 in out-of-pocket costs for doctor visits and other medical services was outraged when they ended up forking over more than $1,000 for similar visits, Mullin said, mostly for seeing doctors whose practices had been bought out by a local hospital.

“The only thing that was different was the office was now hospital-owned,” said Mullin, a Republican. “All of a sudden everything was charged differently."

The root of these increases are controversial charges known as “facility fees,” and they are routinely tacked on to patients’ bills not just for services actually provided in hospitals, but also by outpatient care centers and doctors’ offices simply because they’ve been purchased by hospital-based health care systems. Hospitals argue they can’t afford to keep the doors open without facility fees. Hospitals have billed them at least since 2000 when Medicare set billing standards for doctors employed by hospitals, and private insurers went along. Since then, the fees have grown increasingly common, costly and controversial. Critics argue that the billing practice needlessly adds billions of dollars to the nation’s ballooning health care costs and needs to be revamped. Some private insurers have protested the fees and in some cases even refused to pay them, which can add to the patient’s share of the bill. But getting rid of the charges — or even requiring medical offices to post facility fees — has proved daunting, reformers say. Mullin introduced legislation earlier this year to ban the practice in his state, only to see the bill “watered down” to simply require that the fees be disclosed in advance. The state Senate approved the amended bill, but it failed to pass in the House, even though the state hospital association supported it.

Now, as budget cutters on Capitol Hill drill into Medicare payment policies in hopes of finding new veins of cost savings, the fairness of these fees is facing new scrutiny — including from the federal commission that advises Congress on Medicare spending policy. Hospitals are fighting back and have enlisted support from the Service Employees International Union, which represents more than one million nurses, doctors and other health care workers. The stakes are high indeed. A decision by Medicare to quit allowing the fees would almost certainly lead private insurers to do the same across the country and all but put an end to them....

Fees for more than hospital care

Facility fees are a routine part of any hospital bill. But patients can also be hit with facility fees when they seek care from:

Private physicians who have sold their medical practices to a hospital and stayed on as employees. More than half the nation’s doctors now work on salary. When that happens, patients may suddenly get a bill from the doctor and a separate one from the hospital that owns the office. Some prestigious health systems, such as the Cleveland Clinic, also put their doctors on salary and charge a facility fee for office visits.

Outpatient medical centers that are part of a hospital-owned network, including centers treating serious diseases such as cancer or operating specialized clinics for the elderly.

Urgent care centers set up by hospitals largely to treat relatively minor ailments. Thousands of these centers exist nationwide, about one third believed to be hospital-owned. Some don’t tell patients in advance about facility fees.

Outpatient surgery centers where doctors perform routine operations. The centers can charge facility fees that run into the thousands of dollars. As deductibles rise on some insurance policies, patients may not realize they can get stuck with paying larger hunks of these bills than in the past.

The fees date back to April 2000, when Medicare clarified its policy for billing by health groups that hired physicians. At the time, CMS officials acknowledged that critics wanted the agency to forbid hospitals from buying up medical practices for the purpose of converting them to hospital “facilities” that could tender higher fees for the same services. In a response published at the time in the Federal Register, CMS said it understood the concerns, but lacked the authority to “prohibit this practice.” The issue popped up last year when the House passed legislation that extended the payroll tax holiday and unemployment compensation benefits. Tucked into the “Middle Class Tax Relief and Job Creation Act” was a provision to cut about $6.8 billion in Medicare costs by targeting doctor services in hospital-owned offices...The hospital industry fought back hard — and ultimately successfully. The cuts never passed the Senate and were not in the final conference committee bill signed by President Obama in February...

THERE'S SO MUCH MORE TO THIS...YOU WOULD HAVE THOUGHT GOLDMAN SACHS INVENTED IT! TALK ABOUT BLOOD FUNNELS....

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