Hospitals' charging of facility fees for off-site surgical care is drawing scrutiny from Medicare and other insurers as well as the ire of consumers, who see the practice as confusing, unfair or an attempt to generate revenue that is driving up healthcare costs, according to a report in the Boston Globe (free registration required).
The article recounts the story of a man who had cryotherapy to remove 3 precancerous spots in his dermatologist's office, then received a bill for the physician's services — and a $1,525 bill for "operating room" and "facility" fees. Physician offices cannot charge facility fees, but this one had because it is owned by the Lahey Hospital and Medical Center in Burlington, Mass. An article published in the Seattle Times notes that hospitals have justified the charges as defrayment for "overhead such as equipment, staff, medical-records systems, diagnostic imaging and care not covered by insurance or underpaid by Medicare or Medicaid," and "because integrating clinics with hospitals improves care."
As the practice has proliferated, consumers have begun to complain that the fees are unfair and that they drive up the cost of care. MedPAC has therefore decided to have a closer look. In its 2012 Report to the Congress: Medicare Payment Policy, the independent advisory panel recommended that the Medicare payment system allow for a single fee rate for various procedures performed in offices and for basic office visits, regardless of how the site is designated.
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