HHS FAQs puts spotlight on facility fees

We are seeing a nationwide increase in legislative activity to eliminate facility fee charges, despite increasing demand for care coordination and the integration of electronic medical records for facilitating seamless care across a system of healthcare providers.

This disconnect is apparent in recent issuances by the White House, and the US Departments of Health and Human Services, Labor and Treasury (Departments) as they target facility fees under the No Surprises Act and Transparency in Coverage (TiC) regulatory oversight. Thus, signaling a need for the hospital community to better engage the public and government officials in understanding the role of facility fees and the financial burdens associated with creating clinically integrated healthcare.

Facility fees are intended to cover overhead costs associated with running a comprehensive medical system, including expensive technology, medical equipment and the multiple costs associated with staffing the facilities with ancillary medical staff not separately reimbursable by government programs or commercial insurance. Implementation FAQs Part 60, issued by the Departments, question the validity of these facility fees. Along with the accompanying Fact Sheet, the Departments express concerns over "an increase in patients being charged 'facility fees' for health care provided outside of hospitals, like at a doctor's office," and announced that providers must make information about facility fees "publicly available to consumers."

The Transparency in Coverage (TiC) final rule requires health plans to make certain cost-sharing information available to enrollees, such as estimated cost-sharing liability for covered items or services furnished by providers. It also requires "issuers to make price comparison information available to participants, beneficiaries and enrollees through an internet based self-service tool and in paper form, upon request." The No Surprises Act requires a facility or provider to ask if the individual has health coverage and to provide a good faith estimate (GFE) to insured individuals when they schedule items or services (or upon request). If the individual has coverage, then the plan or insurer must be notified so that an advanced explanation of benefits may be provided (this requirement currently is not being enforced). If the individual does not have coverage they must be provided with the GFE by the provider or facility.

The Departments cite to legislation taken or being considered by Connecticut, Minnesota, Texas, Washington and Colorado to prohibit, limit or increase transparency of facility fees. They also reiterate to providers, facilities and issuers that "[f]or purposes of the TiC requirements and the uninsured (or self-pay) GFE requirements, 'items and services' are explicitly defined to include facility fees." To that end, the Departments are encouraging providers, facilities and issuers to "minimize the burden" from facility fees to individuals and say they are "monitoring this issue." It is not uncommon for government agencies to "monitor" an issue prior to taking action in subsequent years to increase oversight or implement regulations that will require adjustments in policy by regulated entities. Consequently, healthcare providers should anticipate a period of intensified monitoring of facility fees by federal and state governments.