Maine Legislature may restrict ‘facility fees’ charged by hospitals

Maine lawmakers will consider a bill to strictly regulate – in some cases ban – so-called facility fees that are sometimes tacked onto medical bills and can add hundreds of dollars to the cost of routine hospital visits.

The charges are controversial, with consumer advocacy groups arguing that they unfairly shift costs onto patients without warning and hospitals maintaining that the fees are needed to support an array of uncompensated services they provide.

Senate President Troy Jackson, D-Allagash, and House Speaker Rachel Talbot Ross, D-Portland, are sponsoring the bill, indicating it’s a priority among Democratic leadership.

Jackson drafted the bill after a Press Herald investigation revealed that health care providers are adding – and sometimes hiding – surcharges called facility fees to patients’ bills, often charging hundreds of dollars simply because an outpatient procedure or test was performed in a hospital. The newspaper’s investigation, published last August, reported that patients are surprised, confused and frustrated by such charges, and that insurance companies are not covering them, leaving patients stuck paying the bill.

In one example, a Portland patient complained of being charged a $510 facility fee for a few minutes of care for a sliced finger at Northern Light Mercy Hospital in Portland.

Jackson said Thursday that the legislation will help make health care more affordable and accessible.

“The goal is to clamp down on so-called facility fees and protect patients from being nickeled-and-dimed at every turn,” Jackson said. “We need to make sure that our health care system centers patients, not profits. Prohibiting unwarranted facility fees would mark a step in the right direction.”

A spokesman for Gov. Janet Mills did not respond to questions about whether she supports the bill. But in comments last year, Mills said she is “determined” to “see what more can be done to protect Maine people” from surprise and hidden medical bills.

The bill would ban facility fees from outpatient clinics and other non-hospital locations. For certain procedures, hospitals also would be barred from charging facility fees.

The Maine Department of Health and Human Services would be required to create a list of services for which patients could not be charged facility fees. The list is not spelled out in the bill, but common screenings such as colonoscopies, blood tests, MRIs, mammograms and other routine care would likely be targeted. The legislation also would require DHHS to submit to the Legislature an annual report about facility fees.

Ann Woloson, executive director of Consumers for Affordable Health Care, which advocates on behalf of patients before the Legislature, said the fees are especially anti-consumer because they “are often unknowingly charged to patients.”

“(The bill) provides an initial but measured approach to limiting when and where facility fees can be charged, and requires reporting by hospitals that will help policy makers better understand this particular cost driver,” Woloson said. “If passed, the bill will also certainly help ease a portion of health care cost burden that Maine consumers face.”

Hospitals have contended that facility fees are needed to help recoup the costs of operating hospitals, including treating patients who don’t have insurance coverage or the ability to pay and Medicaid patients who are covered at lower reimbursement rates than patients with private insurance. Unlike hospitals, many private medical practices limit the number of uninsured or Medicaid patients they will care for.

Jeff Austin, vice president of government affairs for the Maine Hospital Association, said the bill would regulate rates, which the state is not set up to do for private insurance.

“We don’t have a (public utility commission) type body set up to do rate regulation,” Austin said. “We shouldn’t be regulating rates in one-off bills by the Legislature.”

Austin said where the state does regulate rates, in the combined federal-state Medicaid program, the state only pays 76% of the cost of hospital services.

“The state has a track record of setting rates that makes us nervous,” Austin said.

Austin said hospitals provide many money-losing services that independent outpatient centers can’t or won’t do, such as clinics in rural areas. Limiting fees could result in reduced access in parts of rural Maine, Austin said, as hospitals look to contain costs.

Proposals to regulate facility fees are 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.