Facility fee change proposed for hospital bills, CPI explains

Filed Under: Costs, Patients, Providers

High emergency-room bill? Blame that mysterious facility fee. Well, now the Government is trying to hold down fees by imposing a flat rate, a change that will apply only to Medicare patients.

“Federal officials for more than a decade have let hospitals decide on their own how much to charge Medicare for certain emergency room overhead and staffing costs called ‘facility’ fees — a controversial policy some critics believe invites overcharges.

“Now in a major turnabout, the Centers for Medicare and Medicaid Services are seeking tighter controls over the fees as part of a plan to redirect billions of dollars Medicare spends annually on outpatient health care. But this new proposal, though still preliminary, is already drawing fire on its own.

“CMS officials want to replace five escalating price codes hospitals can choose from in billing facility fees with one flat rate, starting next year. Whether charged at one rate or five, the mere existence of facility fees is contentious because they come on top of physician bills and hospital charges for tests, medicines and other supplies, and have risen sharply in recent years. Hospitals counter that the fees are needed to help defray the costs of big-ticket medical technology and resources, such as operating rooms.” — Fred Schulte, Feds propose shakeup for emergency room billing, Center for Public Integrity.