Hospitals’ Sneaky Billing Tactics Drive Up Costs for Patients

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The practice of hospitals acquiring doctor's offices and clinics and then adding "hospital facility fees" is resulting in higher costs for patients. Despite patients not setting foot on a hospital campus, these fees can be added to bills from facilities that are miles away from the hospital, driving up healthcare costs for consumers. The United States of Care, an advocacy group, released a report highlighting how hospital financing is negatively affecting consumers through these added fees.

Historically, hospital bills have traditionally been composed of professional fees charged by doctors and facility fees charged by hospitals. Trade groups like the American Hospital Association argue against efforts to curb facility fees, stating that the costs of providing unique services to communities justifies these fees. The growing trend of healthcare consolidation, with 41% of doctor's offices now affiliated with hospitals, has led to higher facility fees, as highlighted in a 2023 research letter.

Research has shown significant price discrepancies between hospital fees and ambulatory surgical centers for the same services, with hospitals charging about 150% more. The acquisition of physician practices by hospitals has led to price increases, with one study finding an average 14.1% price increase after merging with a hospital. Criticism also extends to private insurers, who are accused of contributing to price hikes through complex reimbursement schemes.

Efforts by state lawmakers to address this issue have emerged, but federal reforms were dropped in February, despite bipartisan concerns. Advocates from US of Care are calling on legislators to stop paying more to hospital-affiliated doctor's offices, require reporting on facility fees, and disclose these fees on bills to increase transparency and protect patients from the burden of escalating healthcare costs due to provider consolidation.

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May 21, 2023 | 05:09