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Hospital charges bring a backlash

Patients objecting; state adds scrutiny

Patients, angered by surprise surcharges that hospitals tack on bills for doctor visits, are increasingly challenging these fees — sometimes even refusing to pay.

Hospitals say the charges cover their overhead, but the fees are sometimes added to the bill even when patients are treated in offices miles away from the medical centers.

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The fees can reach hundreds of dollars, and some resistant patients end up being pursued by collection agencies. Others, such as Wendy Frosh, are dropping longtime caregivers in favor of physicians not employed by hospitals.

Tufts Medical Center charged Frosh a $500 “facility fee’’ for a routine 20-minute exam in an adjacent office building — on top of roughly $250 a surgeon billed for his services, she said. After complaining in vain to Tufts, Frosh switched to a new doctor.

“I am willing to spend my money for my doctor — I am getting expert care,’’ said the New Hampshire resident. “I am not willing to pay $500 to sit in a waiting room.’’

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State officials have taken notice of the uproar. The Health Policy Commission, a newly created agency that monitors health care costs, decided to examine these so-called “facility fees” after the Globe published a story in January about a patient charged $1,525 in operating room and facility fees for a minor skin procedure. And a spokesman for Attorney General Martha Coakley said last week her office is reviewing the practice after receiving complaints from consumers.

One of these patients, who asked not to be identified because she hasn’t found a new doctor, went to her internist in Walpole for a checkup that included a routine blood test. She was charged more than $2oo in “outpatient’’ fees by Newton-Wellesley Hospital, which owns the practice but is 20 miles away.

Hospitals have charged overhead fees for more than a decade, arguing that they help pay for crucial services such as 24-hour emergency rooms and trauma units. A Tufts spokeswoman said facility fees like that charged Frosh also support research, teaching, and the cost of complying with licensing requirements that private physicians’ offices are not subject to. She said Tufts is still one of the lowest-cost academic medical centers in the state.

But many in the health industry believe the use of the surcharge has expanded as hospitals buy up physician practices in the community.

Another reason patients are fighting back: Many now have high-deductible health plans. In the past, consumers might not have noticed facility fees listed on their paperwork because their insurer paid them.

That’s no longer always the case. After the Globe published the January story about Robert Reed’s bill from Lahey Clinic, more than 15 readers contacted the newspaper about similar bills from academic medical centers and community hospitals. Most said they had protested in vain.

Reed has since filed a complaint with the attorney general’s office.

The charging of facility fees for care delivered in off-campus doctors offices is “a concerning practice,” said David Seltz, executive director of the Health Policy Commission. “We have had initial conversations with some of the providers to try to understand their position.’’

The commission does not have the power to outlaw facility fees, he said, but could recommend such action to the Legislature. The commission, however, is charged with implementing provisions of the state’s new health care-cost control law, which will require insurers starting in October, and eventually providers, to tell consumers in advance how much their care will cost, including facility fees.

Seltz said another question is why insurers agree to pay facility fees as part of their contracts with providers in the first place.

Rick Weisblatt, senior vice president at Harvard Pilgrim Health Care, said Medicare rules allow hospitals to bill for overhead for care provided at physician’s practices they own. Harvard Pilgrim denies facility fees for routine exams, but pays them when a doctor performs a procedure, even a minor one. However, the insurer is negotiating lower overhead fees for care not provided on a hospital campus, he said.

Weisblatt pointed out that high-deductible plans were intended to focus patients on the cost of care because they are spending their own money, not the insurer’s. “We’re pulling the covers off some of the arcane ways that hospitals bill,” he said. Consumers “will create the pressure to correct these practices.’’

A year ago, Marcia Veale saw her regular nurse practitioner, who applied liquid nitrogen to destroy two precancerous spots. Veale paid a $20 copayment for the visit at the independent practice in Middleton. She followed up two weeks later with a dermatologist, who sprayed two other blemishes.

This time the provider was affiliated with Lahey Clinic in Burlington — the same practice Reed went to. Veale received a bill for $836 in operating room fees. She refuses to pay her share — more than $600 — and Lahey has hired a collection agency. “I am sorry, if you are going to charge that kind of money, that should be said up front,’’ she said in an interview. “I will never go back there.’’

Doris Jurisson of Cambridge, who got a similar bill from Lahey after a dermatology appointment, said she was told by a billing representative, “We get a lot of complaints on this, but this is just the way we do the billing.” She ultimately paid the fee.

Other patients said they have been charged facility fees for seeing dermatologists at a Newton medical practice owned by Brigham and Woman’s Hospital and at Wing Memorial Hospital’s physician practice in Belchertown 10 miles away. The Wing patient said the hospital waived the fee when he complained.

A Lahey spokeswoman said in a written statement to the Globe that at the dermatology office on Wall Street in Burlington, signs are posted at the entrance and in hallways warning consumers they may be charged a hospital facility fee in addition to their doctor’s fee. Patients said they did not notice the signs, and that even if they did, they gave no hint that the hospital fee would be so high.

Partners, which also owns Massachusetts General and Brigham and Women’s hospitals, said more patients are protesting facility fees, which the organization also charges at Brigham and Women’s Advanced Primary Care Associates in Jamaica Plain and at Brigham and Women’s/Mass. General Health Care Center in Foxborough.

Most “complaints we receive are from patients that have moved into new, high deductible plans and are unaware of what their insurance does or does not cover,’’ said spokesman Rich Copp.

When asked whether Partners would stop charging the fees, Copp said that “we are constantly reviewing and evaluating our practices’’ but that Partners “alone cannot change the way hospital billing works around the country.’’

Not all hospitals defend the fees. Mercy Regional Medical Center in Lorain, Ohio, decided last month to advertise its opposition. Its website states: “While some local hospitals choose to charge a facility fee, Mercy chooses not to take advantage of its patients.”

Liz Kowalczyk can be reached at kowalczyk@globe.com.
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