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Hospital fees shouldn’t apply for treatments in doctors’ offices

When health care providers send out confounding medical bills thick with mysterious fees, it’s stressful to patients, and it illustrates a troubling lack of transparency within the health care system. Consider the case of local patient Robert Reed, who hhad three pre-cancerous spots treated with liquid nitrogen at a suburban dermatologist’s office last year — and was billed not just for the doctor’s visit, but for $1,525 in operating room and hospital charges.

Reed’s case, profiled in a recent Globe article, isn’t unusual. Amid widespread confusion about who’s paying whom and for what, it’s easy for costs to keep on going up. That’s why it’s important for medical bills to reflect the true price of the procedure — and avoid any add-ons that seem designed simply to take advantage of arcane insurance rules.

Special fees may be necessary for proper administration of a hospital or operating room, but they shouldn’t apply unless a procedure is actually conducted in a hospital or operating room. And if eliminating those fees for office procedures like Reed’s forces hospitals to raise the fees for patients undergoing more complex procedures, that will at least result in a more appropriate accounting of costs, allowing patients and insurers to police them accordingly.


The fees orginated as a way for hospitals to cover the costs of major equipment and support services. Then, as more doctors became salaried employees of hospital systems, they began applying the fees routinely for certain services — even when those services occurred in a medical office. But as with so many of the other cross-subsidies and indirect payment streams built into the US health care system, it’s all but impossible for outsiders to tell whether such fees are reasonable or not. Insurers, quite understandably, are pushing to eliminate those fees but haven’t succeeded yet.

Consumer reaction has been somewhat limited, because people with low co-pays often pay only a small fraction of the list price for medical care. But for patients such as Reed who have high-deductible plans, any extra fees can be painful. And while people in that situation theoretically have a strong incentive to shop for the best price, comparing costs can be difficult. In Reed’s case, the only disclosure of the fee came through a hallway sign noting that, because the doctors’ offices were operated through a hospital, “the care you receive may have a hospital facility charge.” That’s hardly sufficient warning for $1,525 in fees.


Fees like these should become less of an issue as more people join accountable-care organizations; under those arrangements, doctors and hospitals aren’t paid on a fee-for-service basis, but rather an annual sum for taking care of a population of patients.

Public pressure will help, too: On Wednesday, a subcommittee of the state’s new Health Policy Commission will begin examining this issue. That’s an encouraging development. Hospitals and their satellite physicians should give patients an accurate idea of what they’ll be paying out of pocket, and make sure that the bill reflects actual services, rather than some impenetrable payment scheme to help the hospital recover unrelated costs.