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New Doc’s Office “Facility” Fees Spark Outrage

by Thomas MacMillan | May 27, 2014 8:03 am

(20) Comments | Commenting has been closed | E-mail the Author

Posted to: Health, State

On a recent visit to his doctor, Johnny Dye paid his insurance co-pay, then got a surprise in the mail: A bill for an extra $30, for a vague new “facility fee.”

Yale-New Haven Hospital (YNHH) had purchased Dye’s doctor’s practice, resulting in an extra charge tacked on to every patient visit.

Thanks to a law just passed by the state legislature, people like Dye, who lives on Arthur Street in the Hill, might not be surprised by facility fees in the future.

But they’ll still have to pay them—for now.

Another recently passed bill charges the state comptroller with studying facility fees, which may set the stage for legislation to limit or eliminate them.

The new fee has emerged as a public issue this spring. Upon discovering the unexpected charge in bills mailed to their homes, Dye and his neighbors have raised complaints about the fee for three straight months at meetings of the Hill South management Team. One month the neighbors questioned a hospital official about it. At the most recent meeting, this past week, they raised it again with their state representation, Juan Candelaria, who promised legislators would tackle the issue in the next session. Yale University unions have taken on the topic, warning that hospital takeovers can mean increasing bills and decreasing patient choice.

Marcia Chambers PhotoMeanwhile, up the Shoreline, Ted Kennedy Jr. (pictured) made a point of singling out and criticizing the fees when in a speech last week as he accepted the Democratic nomination for state senator. He drew cheers when he said, “I don’t think it is right for patients to have to pay three times more in their doctor’s offices than they did the year before for the same exact services only because the hospital recently acquired the practice and now there is a new sign on the door and a new rate.”

Johnny Dye said senior citizens like him shouldn’t have to pay a “bill on top of the bill,” that it can be too much for people with limited incomes to bear.

Vin Petrini, YNHH senior vice-president of public affairs, said that facility fees are an unavoidable part of Medicare regulations and that they make sense because hospital-owned practices can provide better and more efficient care.

The debate over facility fees is just one part of a larger discussion about the effects of hospitals expanding their reach, buying up private medical practices.

In 2012, YNHH bought out the Hospital of St. Raphael, becoming the one of the country’s largest hospitals. Recently, YNHH, a not-for-profit, moved to join forces with a large hospital management company that’s looking to buy four hospitals in Connecticut and convert them to for-profit institutions. YNHH has also been acquiring doctors’ offices and private practices.

“Whacked Like Hell”

Thomas MacMillan File Photo Facility fees help hospitals pay for the extra expense of providing 24-hour emergency care. They are a normal part of billing for hospital visits. But in the new health care landscape, in which hospitals are buying up private medical practices, patients can incur facility fees even when they don’t go to the hospital, if they visit hospital-owned medical practices.

That’s what happened to Dye, who described himself as “over 70.” He said he got a facility fee bill after a visit to a medical specialist.

“I’ve got five or six specialists I go to,” he said. He visits some every four months, some every six. A $30 fee for each of those visits will add up, he said. “When you get to be a senior citizen, that’s a grocery bill right there.”

Dye said he can afford it, but lots of older folks can’t. “That’s a bill on top of the bill.”

Dye said he could probably find a different specialist outside of the YNHH system, to avoid the co-pay. But he doesn’t want to go out and shop for a new doctor. “These guys have been taking care of me for 15 to 20 years.”

“Senior citizens get whacked like hell,” Dye said. “A lot of them are having trouble with just paying for their medicine.”

As fees add up, people may have to choose between paying medical bills and paying for things like heating oil, Dye said. (he declined to be photographed for this article.)

“It’s hitting people hard, because people don’t have any money for this,” said Angela Hatley, the communications director for the Hill South management team. She said other Hill neighbors have joined Dye in raising concerns about the fees.

“Robust Assistance”

YouTube At April’s community management team, YNHH’s Petrini came to explain facility fees.

“In essence what a facility fee does is it covers the 24-7 operating costs of a hospital,” Petrini (pictured) said in an interview with the Independent. The fees help cover the cost of services like a round-the-clock emergency room, with people ready to handle any trauma.

“It’s a byproduct of the broader services that the hospital offers,” Petrini said.

Even though Dye didn’t visit the hospital and didn’t use emergency services, he was still charged a facility fee because his doctor’s practice is now owned by the hospital.

“Those fees are part and parcel of the hospital bill,” Petrini said. “We have to uniformly charge across all different providers that are hospital-based.”

“Hospital-based” means owned by the hospital, even if a practice isn’t located at the hospital.

Petrini said the hospital is aware that facility fees can be a hardship for some people. “We have a very robust assistance program,” he said.

Patients can qualify for free care if they’re earn below 250 percent of the federal poverty level. If they earn between 250 and 400 percent, they can qualify for discounted care.

“We’re working on updating our financial assistance policies to try to address these issues,” Petrini said.

“Eat Those Fees”

Starting Oct. 1, health care providers will be required to notify patients of facility fees, in advance of medical appointments. That change is due to the passage of House Bill 5337.

Petrini said YNHH worked with the state attorney general on drafting the bill. He said the hospital has been notifying people of facility fees with “signage” but hasn’t been mailing out notices. “Now we’re going to make a much better effort,” he said.

“This is an enhancement in transparency in health care costs,” said New Haven state Sen. Martin Looney. Now patients will know in advance what they will be billed for “rather than be blindsided by it afterwards.”

Advance notice is fine, but facility fees should be prevented entirely, Hatley said. “We want them to eat those fees.”

Part of the problem, said Jay Sokolow, a radiologist who headsthe New Haven County Medical Association, is that hospitals have not traditionally been in the business of running private medical practices. The billing structure as it exists is not set up to reflect the difference between a hospital visit and a visit to a doctor’s office owned by a hospital.

“This kind of highlights where regulation is way behind,” Sokolow said. “It’s a model that we haven’t really looked at what the ramifications are.”

So, how about doing away entirely with facility fees?

“We could very well wind up doing that next year,” said Sen. Looney. This year, the attorney general’s proposals didn’t call for that.

Facility fees make sense for hospital treatment, Looney said. “But hospitals are not gobbling up community-based facilities and making them satellites.” Facility fees make less sense in that context.

“We may decide they are an unfair surcharge,” Looney said. The comptroller’s study will look into that question, to assess the “appropriateness and reasonableness” of facility fees.”

“It’s something that we will be looking at closely,” Looney said. “The legislation we passed may turn out to be just the first step.”

Petrini said facility fees are reasonable in hospital-owned medical practices because the hospital holds offices to high standards and protocols, leading to better care.

Looney said that’s a difficult argument to make when a patient receives the same care from the same doctor and only the ownership has changed. The comptroller’s study will look at the matter closer, to see if the state should move to limit or eliminate facility fees, Looney said.

“It’s a worthy debate,” Petrini said, on the matter of eliminating facility fees. “Certainly in the context of all that’s happening in health care right now, it’s worth having.”

But the debate should be placed in the larger context of how care is provided and paid for, he said. With “the vast majority of patients paid for through government payers” and Medicare and Medicaid seeing big cuts, “there has to be some opportunity for providers to work collectively.”

New Haven state Rep. Pat Dillon also called for a broader discussion.

“Hospitals were charging the fees because they could, so it’s important that we took steps to protect consumers,” said Dillon. “But we should all be accountable. It’s simplistic to single out hospitals but leave out government’s role and insurers as bad actors. We expect emergency rooms to be open 24/7 and take everyone whether they have insurance or not. This year activists and legislators were all over the map, first taxing hospitals and then cracking down on facility fees, but they let other parts of the system off the hook.”

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posted by: Paul Wessel on May 27, 2014  8:13am

“Those fees are part and parcel of the hospital bill,” Petrini said. “We have to uniformly charge across all different providers that are hospital-based.”

This is an assertion masquerading as a fact.

Allocation of hospital costs has long been a shell game necessitated by a fragmented health payment and delivery system. 

This approach is particularly egregious.  Thanks for taking it on, Mr. Dye and others.

posted by: Threefifths on May 27, 2014  10:09am

This is why we need single-payer national health insurance.

http://www.pnhp.org/

posted by: Carl Goldfield on May 27, 2014  10:27am

I’m still totally confused as to how a supposed non-profit-YNHH- is joining with a for profit “management” company to take over four hospitals which will be run for profit. I’m sure this arrangement is being cleverly fashioned to fit into the IRS regulations governing non-profit institutions. However, if the salaries earned by the top YNHH administrators didn’t already put the lie to the institutions non-profit status (looks to me like a large number of YNHH employees are making quite a healthy profit) this proposed arrangement strips the facade. You want to charge a facility fee so you can pay the chief executive a multimillion dollar pay package? Fine, but start paying taxes just like every other profit making business. I am becoming really concerned about the “hospital-industrial” complex.  It looks to me as if were are heading inexorably to one monopoly health care provider in southern CT and that’s YNHH. If we don’t get some really strict regulation in place (Senator Looney we are counting on you)we are going to be picked to the bone.

posted by: Noteworthy on May 27, 2014  10:36am

Healthcare BS Notes:

1. YNHH is creating a monopoly and it is doing so by buying the medical practices, radiology practices and hospitals - in effect -  controlling every aspect of medical care in half the state.

2. This is rotten for the consumer. And Yale knows it. But it is what it wants to do in order to pay multi-million dollar salaries and millions more to doctors in all the specialist fields. Those practices are very lucrative and YNHH wants the dough.

3. It is patently, completely untrue that this is about efficiencies and medicare. This is all about Yale’s bottom line - it is a for profit, non-profit. Under the current plan, Yale controls vast amounts of the healthcare landscape.

4. The facility fees do not pay for Emergency Care. Yale provided and recently expanded its ED department and opened up new ED departments - precisely because it is so profitable. The facility fees have nothing to do with covering routine costs - it has everything to do with getting more money out of the patient that is not subject to insurance and/or co-pays.

5. It is also laughable that Yale has a robust customer friendly policy to help consumers. If you don’t pay within 30 days, Yale is calling your cell phone, your home phone and then turning you over to collectors.

6. If Mr. Petrini is going to put out statements, they should be true.

posted by: Noteworthy on May 27, 2014  10:40am

Emergency Room Notes:

1. The base cost of going to the Emergency Room is more than $1100. That’s before they stick a needly, give you a $25 aspirin or have a doctor look at you.

2. If that fee doesn’t cover administrative costs, then Yale’s overhead is extreme.

3. The facility fee is not only unearned and unjust, it is unavoidable. Yale is putting more and more pressure, extreme pressure on doctors to sell out. Giving consumers “notice” is lame - “I’m giving you notice I’m screwing you. Not today - but you will get it in the mail.” That’s supposed to make me feel better?

posted by: mm on May 27, 2014  11:02am

The facility fee is not uniformly billed for all patients. Medicaid does not pay this fee, and as Medicaid patients (which includes Husky) don’t pay co-pays they don’t get hit with the fee.  I saw this when taking my child, who has Anthem, and my foster child, who has CT Husky Medicaid to the same doctor.  I had to pay the facility fee for my child, but none was charged for the foster child.

The bright side of the hospitals buying the doctor’s practices is that many doctors who previously turned away Medicaid patients can no longer do so. The hospitals accept medicaid and have to do so in their OWNED doctors offices as well.  This is the chance for Medicaid patients to avail themselves of some of the best medical professionals who were previously unavailable.

posted by: DavidK on May 27, 2014  11:53am

For those who believe single payer is the solution, don’t you realize the (VA) Veterans Administration has a single payer. The VA is fudging the books and increasing appointment waiting times. It’s the governments way to ration health care as practiced in many socialist health care systems. This is the direction Obamacare is going. We will then have socialized medicine.

posted by: PH on May 27, 2014  11:59am

Vague fees with no justifiable basis are intolerable.  Hospitals are joining those paragons of customer service, the cable, phone and utility companies with all of their blandly named fees that are simply used to line the corporate bottom lines. With hospitals joining the extraneous fee party patients don’t get better treatment and the services don’t improve; the only thing that is enhanced is the paycheck to the executive staff and the cash on hand for the “non-profit” hospital to swallow up everyone who even remotely resembles competition.

Legislators need to stop these outrageous fees and the acquisition of doctor’s practices because nobody else has the power to intervene with these massive, sprawling and abusive corporate monopolies.

posted by: accountability on May 27, 2014  12:54pm

This is a bipartisan mess. Bush era regulations allowed hospitals to charge medicare for doctors’ offices within 25 miles of their core campus as if those practices were part of the hospital’s outpatient department. The Obama Administration and Congress have done nothing to fix this even though Congress’s advisory panel has recommended eliminating them for three years.

So, just as health care reformers try to get patients seen in less costly, more appropriate settings, the hospital industry is spreading its high prices to physician office settings like a virus.

And why is Rep. Dillon trying to change the subject? Sure there is misbehavior by insurance companies, but this is an egregious abuse by the hospitals and nobody else.

Whenever health care companies get caught ripping consumers off, they always call for a “broader dialogue.”

If they at least stop collecting the patient portions of these fees, we’ll have somewhere to start from.

posted by: Noteworthy on May 27, 2014  3:37pm

Couple other notes:

1. Rep. Dillon’s comments are as all over the board as the legislation this year. But this part is not: The dome dwellers let Yale get away with another year of charging facility fees while they do a study. What will that cost consumers? How many millions is Yale collecting in this fee?

2. Facility fees are not capped at $30 - they can go much higher as YNH knows. In some cases, reported to the Office of Healthcare Advocate in Hartford, those fees have exceeded $1,000.

3. I also take exception that this fee is justified because YNH holds the acquired practices to higher standards “leading to better care.” That is a crock and leads one to ask if those doctors were providing substandard care before, why in hell Yale New Haven Hospital would purchase those practices and retain those doctors?

4. Facility fees are a ripoff to consumers. Yale should end the practice immediately and do so voluntarily. If it and other hospitals don’t, then the legislature should quit playing and issuing gobblygook statements and end the practice for them.

5. In the meantime, consumers should look for a medical practice that doesn’t carry the Yale logo where the new motto seems to be: “We heal your bodies, and wreck your wallet.”

posted by: Rep. Pat Dillon on May 27, 2014  3:41pm

I suggested a look at the whole system because legislative / activist demands and policies this past session seemed in conflict, so it isn’t clear what the expectations are.
For example:
- one bill banned for profit hospitals
- one bill required hospitals to pay local property taxes
- the state budget now treats all hospitals as for profit by imposing a state tax (user fee) on all hospitals - some of which are struggling - yet we give state dollars to profitable companies to stay here. (U Conn/Dempsey, since it is state operated, is exempt.)
- after negotiation, final action - which most of us barely had time to read the last day - permitted medical foundations to be for profit.

I mentioned insurers because it is so timely: this year United Health / AARP forced consumers in the greater New Haven area to
choose between keeping their doctors and paying out of network fees, or losing continuity of care. There was very little
outcry about that. Insurers have the power to
do that, but they caused distress to thousands -  many constituents - and yes, insurers were let off the hook.

posted by: Shaggybob on May 27, 2014  3:52pm

This is just retaliation for health care reform.
It is essentially a DOUBLE CO-PAY. Now that by law everyone needs coverage they can pillage all the insured and underinsured.

This needs to be stopped ASAP.

I am so outraged.

YNHH Hospital should be ASHAMED of themselves. They survived how many years without this “subsidy” for ER service- what a crock. Since when do the hard working taxpayers, the elderly and those on the poverty line have to bear the burden. Oh yeah since the corporate giants can squeeze em. Like YNHH is losing money.

Refuse to pay and let them try collecting $30 in small claims.
Nothing more than LEGAL ROBBERY !!

posted by: Threefifths on May 27, 2014  4:08pm

posted by: DavidK on May 27, 2014 11:53am

For those who believe single payer is the solution, don’t you realize the (VA) Veterans Administration has a single payer. The VA is fudging the books and increasing appointment waiting times. It’s the governments way to ration health care as practiced in many socialist health care systems. This is the direction Obamacare is going. We will then have socialized medicine.

And under the present system I can not see the Books.Under a single payer system everyone is insured, period, from the cradle to the grave.Also under the present system Health insurance executives got massive salary increases.

My bad Medicare is a single payer system.

posted by: Don in New Haven on May 27, 2014  9:19pm

This facility fee and many other tax-related concerns associated with YNHH should be defined by the State government. In my opinion, only those physical YNHH facilities that are clearly used for university education MAY receive tax-exempt status.

Also, any not-for-profit facilities should not be taxed.

Why the facility fee was not called an administration fee puzzles me because calling it a facility fee indicates that the facility is for profit, therefore taxable.

I think Yale has over-stepped its bounds and will pay dearly for buying up profit centers while dreaming they will be converted to either education or not-for-profit as it begins to experience the nightmares of paying taxes.

posted by: citoyen on May 27, 2014  10:45pm

DavidK,

It is too easy to throw around terms like “single-payer” and “socialized medicine” in a sloppy way.

The Veterans Administration is a single-payer system, because funding for it is handled through the federal government.  It also does happen to be socialized medicine, because the federal government directly owns the hospitals, and directly employs the doctors, who treat patients.

Medicare, too, is a single-payer system, because it is the federal government that funnels payments to doctors and hospitals (at, it must be said, a small fraction of the overhead costs incurred by private insurance companies, because Medicare does not pay executives exorbitant salaries, and does not employ legions of staff whose jobs are to try to deny people coverage).  But Medicare is not socialized medicine, because it does not own hospitals or employ doctors—it makes payments to private hospitals (whether for-profit or non-profit) and to doctors in private practice.

America absolutely *should* have a single-payer health care system.  It should not necessarily have socialized medicine like, say, Canada, or Britain.  There should be Medicare for all.

posted by: Noteworthy on May 28, 2014  7:46am

Pat Dillon Notes:

1. When politicians don’t want to solve a problem, where their own feelings are in conflict, not ours; where special interests they favor are in conflict, not ours;they make the problem larger. Dillon has done exactly this and now doubles down.

2. None of the issues listed by Pat Dillon are in conflict with facility fees, unless Dillon knows that these facility fees are the insider tradeoff for taxing hospitals by hundreds of millions of dollars. This was done to “balance” the state budget which we now know was a pig in a poke. It has made our healthcare more expensive. 

3. The reality is, super-size non-profits the size of Yale New Haven, Yale University should be subject to property taxes when there is great disparity between PILOT funding and voluntary PILOTS. Is that so hard and how is that in conflict with facility fees? It’s not. Looney’s political fight with Sharkey had a lot to do with this issue too.

4. Dillon, like Yale New Haven’s public comments should reflect truth, not spin.

5. Revised Yale Motto: “We heal your body - And infect your wallet.” Politician’s motto: “Take an aspirin, and call us next year. Or not.”

posted by: Don in New Haven on May 28, 2014  8:40am

If YNHH is not-for-profit, where does it get the money to buy every private doctor’s office and practice. What is the true purpose for YNHH to buy all competition and create a monopoly?

The time has come to bring this blossoming fraud to an end. The appropriate State government office should audit YNHH to see how not-for-profit YNHH really is. Discovered tax abuse should supply funds to be used for tax relief of cities and residents.

posted by: Threefifths on May 28, 2014  9:37am

posted by: citoyen on May 27, 2014 10:45pm

DavidK,

It is too easy to throw around terms like “single-payer” and “socialized medicine” in a sloppy way.

The Veterans Administration is a single-payer system, because funding for it is handled through the federal government.  It also does happen to be socialized medicine, because the federal government directly owns the hospitals, and directly employs the doctors, who treat patients.

Homerun.You are on the money.

@ David K

Check this out.Did you know that New York City owns it’s own hospitals.Would you call it socialized medicine.


New York City HHC Health and Hospitals Corporation

http://www.nyc.gov/html/hhc/html/about/About-HospServices-Hospitals.shtml

posted by: Walt on May 29, 2014  9:29am

They should check on these and many long-time abuses at Yale-New Haven


Examples:

1,Many years ago,my niece following major illnesses treated at Yale and also at Bristol Hospital,  died.

I helped her mother in figuring out how to pay the bills resulting (health insurance for young folk was rare at the time)

Among her bills were   those from SEVERAL
Yale-New Haven doctors who claimed to have visited my niece at Yale-New Haven while, in fact she was actually bedded at Bristol Hospital,  30 miles away.

Being stone-walled by Yale-New Haven,  fortunately I knew the COB of the Hospital
who intervened to help.

Simple billing error said Yale=New Haven—

Criminal activity say I

2,On a recent stay of my own at Yale-New Haven,  I received bills from 2 doctors and a nurse for services which had already been paid for to the Hospital by my insurance company

Simple billing error they again claimed,  but fortunately my insurance company helped out and the fake charges were reversed

Fraud continues and should be stopped.

Only God knows how many people have been cheated because of these long-time practices

posted by: tpMRS on May 29, 2014  3:14pm

As if we don’t already pay enough for healthcare…

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