Facility Fees Billed by Healthcare Providers
Title 22, Chapter 1683, §8712 2-A requires the MHDO to produce and post on its publicly accessible website information designed to educate the public about facility fees, and whether and under what circumstances, depending on payor and type of service, a facility fee may be charged.
What is a Facility Fee?
Facility fees are the charges institutional healthcare providers, such as hospitals, emergency departments, outpatient departments of a hospital, ambulatory surgical centers, and skilled nursing facilities bill patients to cover their operational expenses for providing healthcare services. Institutional healthcare providers submit these charges separately to Medicare, Medicaid, and commercial insurance from the professional fees physicians and other healthcare practitioners bill to cover their services and expenses.
Overview of Billing Between the Healthcare Provider(s) and Patient
When a patient receives healthcare services the billing process typically involves several steps, and the number of bills a patient receives can vary based on several factors. These factors can include the number and types of services received during the visit, the location and type of healthcare setting the patient visits (e.g. physician’s office, hospital, clinic, lab), the ownership of the setting (affiliated with a hospital system or unaffiliated), the patient’s insurance coverage, and the billing practices and policies of the healthcare provider and payer.
Because of the complexity of the healthcare system and each patient's unique situation, medical bills are often confusing for patients for a variety of reasons, one of which may be when a facility fee is charged, and it was not anticipated.
When You Can Expect a Bill for a Facility Fee
It is likely that a patient will receive a bill for a facility fee when the services they receive are provided in a hospital (for both inpatient and outpatient services) including a hospital’s physician practices, clinics and imaging centers, or a hospital emergency department, an ambulatory surgical center, or a skilled nursing facility.
The facility fee covers the costs of maintaining and operating the facility, including nurses and other medical support staff, medical equipment and supplies, lab and imaging services, pharmacists, housekeeping, 24/7 emergency services, patient education, electronic medical records, security, building maintenance, and other administrative costs.
Note: Maine State law prohibits commercial insurance from paying separate facility fees for services provided in office settings that are not associated with a hospital or are not located on a hospital campus. You should not receive a bill for a facility fee under these scenarios.
Ask Questions Before Accessing Services
Most people don’t like to receive a bill that they were not expecting and did not plan for. To help avoid this from happening,
- Ask your healthcare provider(s) before (or if not possible immediately after) accessing services, whether you should expect to receive a bill for facility fees.
- Ask your healthcare provider if they are associated/affiliated/owned by a hospital or hospital system.
- Request an itemized estimate of the services and costs (this most likely will not account for individual cost-sharing requirements but should provide insight into whether a facility fee will be included).
- Request a copy of the provider’s policy specific to patients’ rights regarding medical billing and dispute resolution.
Conclusion
Healthcare billing is complex and often leads to frustration and confusion because of many factors, including multiple parties (often more than one healthcare provider involved in providing services, patients with different insurance plans, and insurance companies with different policies), an elaborate coding system for the thousands of different healthcare services, different billing regulations and guidelines for different healthcare settings and the difference in coverage (benefits and exclusions) under a commercial insurance policy or under the public insurance programs (Medicare and Medicaid).
State and Federal healthcare transparency laws (like the Maine State law that requires MHDO to post information in CompareMaine) require the healthcare system to be transparent with the public on the average costs of services. The information in the public domain because of these requirements is not customized for each patient’s individualized circumstances but it does provide baseline information to serve as a starting point to begin conversations between a patient and their healthcare and health insurance providers.
The 2023 Report of the Task Force to Evaluate the Impact of Facility Fees on Patients, provides additional information regarding both State and Federal laws related to transparency and information about healthcare costs.
