Maine leaders propose reforming medical facility fees after Press Herald report

When Sean Dundon sliced off a portion of his thumb on Christmas Day, all the urgent care centers were closed, so he went to Mercy Hospital’s emergency room. He said he was in and out in 20 minutes, but the hospital charged him a $510 facility fee. Derek Davis/Staff Photographer

Senate President Troy Jackson said he will introduce a bill to regulate “facility fees” – fees that health care providers often charge patients for the overhead costs of operating the building where they receive care.

Jackson is reviving the issue after an investigation published Sunday in the Portland Press Herald/Maine Sunday Telegram that revealed problems Maine residents have had with medical billing, including huge facility fees tacked on to their bills that insurers often refuse to pay.

Gov. Janet Mills, in a statement to the Press Herald, said she is “determined” to “see what more can be done to protect Maine people” from surprise and hidden medical bills.

Hospitals sometimes hide facility fees in their bills, revealing them to patients only after complaints and requests for itemized invoices.

Patients complained in the Press Herald’s report about the lack of transparency in facility fees.

Sean Dundon, a Portland resident, sliced his finger peeling potatoes on Christmas day and was charged a $510 facility fee at Northern Light Mercy Hospital in Portland. He sought care at the emergency department because everything else was closed for the holiday, but he said he would have waited a day had he known he had to pay an exorbitant facility fee.

“Opaque and misleading medical bills from health care providers and insurance companies are a problem that’s been experienced by far too many Maine people – including me,” Mills said in a statement. “When my late husband, Stan (Kuklinski), had a stroke in 2013, I encountered confusing bill after confusing bill, all of which were then followed by unexplained insurance denials that forced me to fight with insurance companies to try to get the health care my husband needed. It’s an experience that adds insult to literal injury. It’s discouraging, exhausting and downright wrong. Our health care system is still too complex and confusing, and surprise hidden fees are crushing the finances and spirits of hardworking Maine people.”

Kuklinski died in 2014 from the effects of the stroke.

Mira Ptacin, a Portland resident who lives on Peaks Island, said she was told by office staff at Peaks Island Health Center that she was assessed a $142 facility fee for an office visit. Insurance wouldn’t cover it, and she owes about $225 for a brief visit with her nurse practitioner going over medications.

“That’s bonkers,” Ptacin said in an interview this week. “It’s like when you go to the dentist, you don’t pay for their electricity in their building. You pay for their services.”

The health center is affiliated with MaineHealth, the parent company of Maine Medical Center in Portland, several other hospitals and a number of outpatient clinics and specialty services.

John Porter, MaineHealth spokesman, said on Thursday that “facility fees are a normal part of hospital billing practices and they are used in insurance billing by us in accordance with the law.”

Porter said he couldn’t address the specific bill about Peaks Island for patient privacy reasons.

Jackson said facility fees are especially unfair when they are not listed separately on bills, and patients, many times unknowingly, end up paying hundreds of extra dollars that are not covered by insurance. Sometimes insurance companies will pay facility fees, but often they refuse or pay only a small percentage of the fees, leaving patients to pay the bulk.

“At minimum you should know going in that the hospitals are going to hit you with a $500 charge just for being there,” said Jackson, an Aroostook County Democrat. Jackson said addressing the fees and surprise medical bills will be an “extremely important priority” going into the next legislative session, which starts in December.

Jackson said “anything is on the table” – a bill requiring transparency in facility fees, regulating when they can be assessed, or even an outright ban.

Jackson had previously proposed a series of regulations regarding surprise and hidden medical charges shortly before the pandemic started in 2020, but the effort fell by the wayside when the pandemic hit. Now he’s seeking to revive the effort, with facility fees as one focus.

But Steven Michaud, president of the Maine Hospital Association, said facility fees are “there for a reason,” to recoup costs for running costly hospitals, including treating uninsured patients and Medicaid patients, which have lower reimbursement rates than patients with private insurance. Many private practices limit the number of uninsured or Medicaid patients they will care for.

Michaud said banning facility fees would create budget shortfalls for hospitals.

“If they’re going to regulate facility fees, they better find a way to compensate us,” Michaud said.

Michaud said he’s not opposed to transparency in facility fees, but he said he would need to see the details of a proposal before the hospital association would decide whether to support or oppose it.

Proposals to regulate facility fees are still in the early stages in most states, if they are being proposed at all. Connecticut was the first, and so far only state to aggressively regulate hospital facility fees. In Connecticut, hospitals and health care systems must note facility fees on bills and post signs in buildings where facility fees are going to be charged. An addition to the law that begins this October will forbid facility fees from being collected for telehealth visits.