Facility fees have become a significant and often unexpected component of medical bills for many American patients. These fees are extra charges added by hospitals and health systems on top of the cost of medical services and professional fees paid to providers. Originally intended to cover the operational costs of maintaining hospital facilities, these fees have increasingly been applied to outpatient services, even those provided in settings that were once independent physician offices.
Impact on Healthcare Costs
The proliferation of facility fees has substantially increased healthcare expenses for American families. Between 2004 and 2021, facility fees grew by an astounding 531%, a rate four times higher than the 132% increase in professional fees for emergency department evaluation and management services during the same period. This surge in facility fees has contributed to the overall rise in hospital expenses, which saw a 17.5% increase between 2019 and 2022.
In Ohio, the impact of facility fees is particularly pronounced. Data indicates that facility fees are added to approximately four out of every five medical bills sent to the state’s largest insurer for heart disease screening. This widespread application of facility fees significantly elevates the financial burden on Ohio patients.
Specific Impact on Spine and Joint Injection Care
Patients seeking spine and joint injection care are especially susceptible to high facility fees due to the specialized nature of their treatments. For example, in 2019, Medicare paid hospital outpatient departments (HOPDs) $701 for nerve block injections, compared to $256 at doctors’ offices.
This significant disparity indicates that facility fees can substantially increase the overall cost of care for these procedures.
Hospital Systems and the Expansion of Facility Fees
A key driver behind the expansion of facility fees is the trend of hospital systems acquiring private medical practices. This consolidation allows hospitals to charge facility fees for services rendered in formerly independent clinics, thereby increasing their revenue. The financial incentives created by site-specific payment differentials encourage hospitals to buy up local competition to increase prices and shift care to higher-cost settings.
Hospital systems often promote their extensive networks, numerous treatment locations, and large provider rosters as advantages to patients, suggesting that such scale offers more comprehensive and accessible care. However, this consolidation can lead to higher operational costs, which are frequently passed on to patients in the form of facility fees and other charges. The increased size and complexity of these systems can result in administrative inefficiencies and a focus on revenue generation, contributing to the rising cost of care.
Categories of Out-of-Pocket Medical Costs
Patients are typically responsible for several types of out-of-pocket medical expenses, including:
- Premiums: Regular payments made to maintain health insurance coverage.
- Deductibles: The amount patients must pay out-of-pocket before insurance begins to cover services.
- Co-payments: Fixed fees paid by patients for specific medical services or prescriptions.
- Co-insurance: A percentage of medical costs that patients are responsible for after meeting their deductible.
- Facility Fees: Additional charges imposed by hospitals or health systems for the use of their facilities, now increasingly common even for outpatient services.
The addition of facility fees to this list has further strained patients’ finances, often leading to unexpected medical bills. These fees can range from a few dollars to several thousand, depending on the service and facility.
Insurance Reimbursement for Facility Fees
Insurance coverage for facility fees varies. Some insurance plans may cover a portion of these fees, while others may not, leaving patients responsible for the balance. The lack of transparency and consistency in billing practices can make it challenging for patients to anticipate these costs. Moreover, even when insurance does cover facility fees, the additional charges can lead to higher premiums and out-of-pocket expenses over time.
Referral Practices Within Hospital Systems
Physicians employed by hospital systems often refer patients to specialists within the same network. While this practice can streamline care coordination, it may limit patients’ options and prevent them from seeking potentially more affordable or higher-quality care outside the system. This internal referral system also perpetuates the application of facility fees, as services remain within the hospital’s billing structure. The same principle applies to network referrals for diagnostic testing (lab work, x-rays, MRIs, etc.) and allied services such as Physical Therapy, etc. All of these services are subject to facility fees as well.
Advantages of Independent Physicians
In contrast, independent physicians who are not affiliated with hospital systems do not charge facility fees. Receiving care from these providers can result in lower out-of-pocket costs for patients. Independent practices often have lower overhead expenses and may offer more transparent pricing structures, allowing patients to make more informed decisions about their healthcare.
Empowering Patients to Reduce Costs
While most factors contributing to rising medical costs are beyond individual control, patients can take proactive steps to minimize expenses related to facility fees. By choosing independent physicians and clinics, patients can avoid additional facility charges associated with hospital-owned practices. Additionally, advocating for price transparency and discussing potential fees with healthcare providers before receiving services can help patients make cost-effective healthcare choices.
The Regenerative Spine & Joint Center NEVER Charges Facility Fees
The Regenerative Spine & Joint Center (RSJC) is the solo medical practice of Boris Terebuh, MD., who has seven Board Certifications, so you will receive high-quality, cutting-edge spine and joint care at a much lower cost. If needed, we can also direct you to physical therapists and MRI locations that also do not charge facility fees to further your savings. Dr. Terebuh personally conducts each office visit and injection procedure, so your spine and joint care is never delegated to a less experienced provider.
Spine Injection Options Available at RSJC (Performed Without Facility Fees)
- Epidural Injections (ESI)
- Facet Joint Injections
- Medial Branch Blocks (MBB)
- Radiofrequency Ablation (RFA)
- Sacroiliac Joint Injections
Joint Injections Available at RSJC (Performed Without Facility Fees)
- Both Fluoroscopic Guidance & Ultrasound Guidance Available for Safety & Accuracy
- Hip
- Knee
- Shoulder
- Etc., (literally any other joint)
Regenerative Medicine Injections Available at RSJC (Performed Without Facility Fees)
- Discseel® (non-surgical spine disc procedure)
- Bone Marrow Regenerative Cell Therapy
- Platelet Rich Plasma (PRP)
Conclusion
Facility fees have become a pervasive and costly aspect of the American healthcare system, often resulting from the consolidation of medical practices by hospital systems. These fees contribute to the escalating out-of-pocket expenses faced by patients. By seeking care from independent providers (like the Regenerative Spine & Joint Center) and staying informed about potential charges, patients can take steps to mitigate the financial impact of facility fees on their healthcare budgets. It will not be offered spontaneously by network providers, but patients are entitled to request a referral to the Regenerative Spine & Joint Center. Patients are also welcome to refer themselves if providers continue to steer then toward higher cost spine & joint specialty care.
