Behind the Bill: The hidden injustice of hospital facility fees

Hospital acquisitions of private provider practices are accelerating, and hospitals are at the center of a massive market failure that is leading to reduced competition, increased prices, and ultimately unfair and inequitable consumer costsharing. In many ways, hospital facility fees – the charges hospitals levy in addition to professional services charges to cover the 24/7 operational costs of the hospital – and the growing affordability burden they are placing on patients are the symptoms of rampant provider consolidation. And facility fees are a considerable part of consumer cost-sharing when it comes to hospital-related services. As hospitals acquire outpatient clinics, more services are delivered in settings that are now hospital outpatient departments (HOPDs), even when those facilities are not actually part of a hospital campus. This means that following hospital acquisition, facility fees are increasingly attached to services that have very little to do with the everyday operation of hospitals and emergency departments. This places an unexpected and unfair financial burden on certain populations, particularly communities of color, rural communities, and other individuals who already face disproportionate medical debt.1 This report will highlight how increasing provider consolidation fuels financial exposure to hospital facility fees as more previously independent practices become hospital-affiliated sites of care. The report will zero in on the health equity implications these fees have based on race and ethnicity, income, the presence of a chronic or complex condition, and geography. Because of a dearth of data that stratifies facility fee exposure by site of service and by patient demographics, the report makes evidence-based assumptions about equity impacts using proxy data, such as hospital-related medical debt disparities. Finally, the report will set forth policy considerations to protect patients from inappropriate hospital facility fees.