Task force begins review of hospital facility fees

A state task force formed to examine the impact of hospital facility fees held its first meeting Friday and faces a Dec. 15 deadline to draft findings and recommendations for the Legislature to consider when it returns next month.

The group was created last session after Sen. President Troy Jackson, D-Allagash, introduced a bill to limit facility fees in response to a Portland Press Herald investigation that found such often-hidden fees can add hundreds or thousands of dollars in unexpected costs to medical bills. The fees are not always reimbursed by insurance companies, pushing the costs on patients.

Senate President Troy Jackson and Ann Woloson, executive director of Mainers for Affordable Health Care in May. Joe Phelan/Kennebec Journal

Jackson said in a written statement Friday that facility fees “can be one of the most insidious drivers” of health care costs and those costs are not always disclosed to patients.

“Unfortunately, patients are often unaware that these fees exist and only learn about them when it is too late,” Jackson said. “Our health care system is expensive enough. The last thing patients should have to deal with is another unexplained fee. I’m hopeful that this task force will give the Legislature the tools we need to enact meaningful changes for Maine patients.”

The Task Force to Evaluate the Impact of Facility Fees on Patients comprises 10 members that include advocates for hospitals and patients. The group, led by Sen. Donna Bailey, D-Saco, and Rep. Poppy Arford, D-Brunswick, is aiming to complete its work over the course of three meetings to meet its Dec. 15 deadline.

One of the top priorities of the group is to develop a definition of facility fees and determine how they are developed and used. The group also must consider how such fees are addressed in Maine’s existing statutes and determine how new federal rules will affect the use and disclosure of the fees.

The new federal rules, some of which are still being developed, are aimed at increasing transparency for the cost of hospital services so patients can make informed decisions. That includes requiring hospitals to provide “good faith estimates” before health care services are received and for insurers to provide an advanced explanation of benefits for how those costs will be covered.

Maine enacted a slate of state laws to increase transparency of hospital bills and the state will need to review them for conformity with the new federal laws.

Jeff Austin, vice president of government affairs and communication for the Maine Hospital Association, which has defended the need for facility fees, described the new rules as “massive new federal regulations.” Austin cautioned the group from enacting new state laws that would be different from the federal rules.

“What we’re hoping not to have is a separate and maybe slightly different requirement,” Austin said.

Austin said facility fees are not new, but have generated more public awareness as hospitals have bought out private practices – often at the practices’ request – causing facility fees to show up on bills that traditionally excluded them.

Private practices are not allowed to assess facility fees, unless they are owned by a hospital.

Austin said professional service fees typically go to the doctor, while hospitals recoup their costs through the facility fee, which was previously called a hospital fee.

He urged the task force to refrain from calling them additional or supplemental fees, because that money is used to pay for the building, computers, equipment, parking lots, nurses and other services.

“I don’t see that as a charge on top of services,” he said. “I think there’s confusion. There’s lack of understanding. The bills are high enough already that you add on top of a high bill confusion, you’re going to get people upset. So let’s do what we can to alleviate confusion and not add to it, at least at a minimum.”

The task force heard conflicting accounts about the size and prevalence of facility fees in Maine

Ann Woloson, executive director of the Consumers for Affordable Health Care, said facility fees have become more common as hospital networks have taken over private practices and outpatient services. That, plus the high percentage of Mainers with high-deducible plans – 76% compared to 56% nationally – is causing sticker shock for patients, she said.

Woloson said one patient had three separate procedures for an eye injury and was charged three different facility fees, totaling $7,800, even though the procedures were done in the same room and same time. More than half of another’s patient’s $9,000 bill for being treated for appendicitis was a facility fee.

And a third patient, Woloson said, went to a walk-in clinic because of a knee injury. In addition to seeing a physician assistant, the patient had an X-Ray taken across the hall in the same building and was charged two facility fees, though she was reimbursed for one of the fees after a year of haggling.

“We’re hearing more from consumers who are worried about this and are experiencing debt as a result of it,” Woloson said. “Health care costs continue to increase, as does health insurance coverage … so anything we can do to address underlying costs would be really helpful and would be a huge relief to Mainers and people who are struggling to access the affordable care they need.”

Those types of fees were not common in data presented by the Health Care Purchaser Alliance of Maine, a nonprofit with 60 members, including some of the largest public and private employers in the state. Trevor Putnoky, the alliance’s president and CEO, said limiting or prohibiting facility fees would do little to reduce the overall cost of health care, since the costs would be shifted elsewhere.

“I completely sympathize and understand how frustrating it can be for a consumer to see a large facility fee on their bill that they weren’t expecting,” Putnoky said. “Our goal as an organization tends to focus on areas that will impact the total cost of care and reduce premiums for everybody.”

So far, 12 states have regulated facility fees, many of which prohibit or limit facility fees for telehealth visits and require advanced notice of facility fees for other patients.

Jackson’s bill was based on model legislation drafted by the National Academy for State Health Policy, a national, nonpartisan group with offices in Washington, D.C. and Portland.

That legislation has not been adopted in any of the three states – Maine, Colorado and Washington – where it was introduced, according to Maureen Hensley-Quinn, the group’ senior program director. “Through negotiations, the language changed,” Hensley-Quinn said.

The committee will need again on Dec. 7 and Dec. 13.