Report: Underserved Communities Disproportionately Affected by Facility Fees

June 3, 2024
USofCare calls for hospital pricing reform and greater price transparency

On June 3, Washington, D.C.-based United States of Care (USofCare), a nonpartisan advocacy organization promoting healthcare access, released a report emphasizing the impact of hospital facility fees. In a press release, USofCare explained that facility fees are often charged in addition to other fees that support staffing and equipment costs.

According to the report, debt incurred from hospital fees has a disproportionate impact on historically marginalized communities.  Additionally, people in rural areas with fewer provider choices are subject to more facility fees.

“More services are delivered in settings that are now hospital outpatient departments (HOPDs), even when those facilities are not actually part of a hospital campus,” the report notes. “This means that following a hospital’s acquisition of an outpatient facility, facility fees are increasingly attached to services that have very little to do with the everyday operation of hospitals and emergency departments.”

“The equity impact of hospital facility fees is clear and deeply concerning,” USofCare’s director of policy solutions, Liz Hagan, said in a statement. To address the issue of facility fees, USofCare recommends that regulators report facility fee data and that policymakers require facility fees to be clearly disclosed in patient notices.

In a March 12 press release, USofCare expressed feeling encouraged by the Biden administration’s proposed budget for 2025. “Included in the President’s FY2025 proposed budget are critical investments that will expand access to affordable health care, reduce prescription drug prices, and lower the costs of care for people,” the news release read. The budget proposal is also believed to advance health equity by improving access to care.

“President Biden’s budget includes proposals that will make significant progress towards implementing critical targeted changes that we know people want – such as lowering health care costs for people by limiting facility fees,” said Natalia Davis, CEO of USofCare, in a statement.

Healthcare Innovation recently spoke with Lisa Hunter, senior director of policy and external affairs at USofCare. Hunter explained how hidden facility fees disproportionately hurt underserved communities.  “It’s a symptom of hospital consolidation,” she explained. “There is no link to improving care.”  People get slapped with facility fees as if getting care at a hospital without going to a hospital.

Hospital consolidation has led to heightened prices and power imbalances. “Consumers are left holding the bag,” Hunter said. “Over the last decades, hospitals have been buying independent smaller clinics…which has led to a 14 percent increase for the same services.”

A recent RAND report revealed a discrepancy between the amounts paid for hospital services by private and employer-backed health insurance plans and those by Medicaid. Hunter believes it is pertinent to focus on federal levels to obtain greater transparency in pricing. She conceded that compliance is a challenge, particularly when capturing data by the Centers for Medicare and Medicaid Services (CMS).

Hunter shared that the Senate has taken a greater interest in price transparency. She noted a forward momentum. “It’s remarkable to see there’s a lot of support for transparency,” Hunter said, explaining that it is a bipartisan issue.

Hunter remarked that USofCare advocates for reforms on behalf of consumers to achieve affordability. According to a November 2023 poll, reforms are especially popular with 55-plus voters and people in rural areas. Hospitals are getting bigger, Hunter explained, and they have a huge role to play in resolving healthcare costs.

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