Hospitals Under Fire for Billing Patients Billions in Hidden Fees

According to consumer advocates, hospitals overcharge patients billions of dollars every year. Senior Republican Bill Cassidy has urged President Joe Biden to act on this news and give American citizens peace of mind. Here’s the full story.

Unveiling Hospital Overcharges

American hospitals are making billions from overcharging patients. They rack up bills by including “facility fees” on check-ins at outpatient centers, essentially charging people to use a room to meet with a doctor. 

Republican Bill Cassidy has spoken out against it and said, “Facility fees are part of a pattern where patients don’t know how much they are going to be charged in advance of a service.”

He points to the No Surprises Act, a 2022 piece of legislation that was supposed to create some financial transparency between hospitals and patients, but argues that “Unfortunately, the Biden administration still has not implemented this important policy.”

The Promise of Financial Transparency in Healthcare

The No Surprises Act would have changed the way hospitals bill patients “with a provision called the Advanced Explanation of Benefits. With this information, the patient knows how much they will be charged before agreeing to the service,” explains Cassidy.

Hospitals have stated that they need the money from facility fees to compensate for the losses they’ve experienced due to new federal regulations. However, these fees severely impact people’s lives, as they’re lumped with surprise bills for hundreds of dollars simply for seeing a doctor in a room. 

Soaring Healthcare Costs

These fees typically cover a hospital’s running costs and have caused the prices of mammograms, colonoscopies, and heart exams to rise drastically. Critics argue that hospitals are forcing patients to pay for facilities they’re not even using, resulting in many people struggling with poverty.

Ohio and Maine have seen a sharp uptick in the price of heart screening bills, which include a facility fee. 

The Business of Healthcare

A hospital will buy a new clinic, hire some doctors, and then start charging facility fees – which are typically sent as a separate bill for any procedures that may have been done. They argue that these clinics are “extensions of their centralized operations”; however, these fees leave a lot of Americans with little option other than to find a new provider.

According to The Wall Street Journal, “Many hospital systems now get at least half their revenue from patients who aren’t admitted,” and they estimate that more than half of the doctors in the U.S. are employed by hospitals despite only working in clinics.

Doctors in the Crossfire

Hospitals have been buying up more clinics and primary care practices in the last few years. Primary care doctors are typically among the lowest-paid professions and some of the most overworked, yet hospitals have been buying up their workplaces in droves. 

This is partly due to insurers’ sway over hospitals, as they seek new patients and extra profits. As hospitals have increased their stock of property, facility fees have crept up and now, in many cases, have outpaced the price of treatments.

Medicare’s Dilemma

Medicare advisors have argued that the facility fees are too high. In 2021 alone, Medicare paid $6 billion more than it should have for multiple services because the fees were too high. Congress lawmakers have tried to limit Medicare fees in the hope that this will save the government money. 

Just recently, in December, a bill was passed that prevents Medicare from covering hospital fees for cancer treatment or other drug infusions unless they’re at a hospital. 

There’s hope that this will save a lot of people money as they avoid facility fees, and it is allegedly set to save Medicare around $4 billion in the next ten years. Some states have taken steps to limit the scope of facility fees. Indiana clinics have been banned from charging facility fees, while other states, like Colorado, are forcing hospitals to disclose these secret fees to patients before they agree to treatment.