Fees are charged at practices that are considered “outpatient departments of the hospital.”
On May 1, patients of Mary Washington Rheumatology received a message in their inboxes.
“As of 7 a.m. June 3, 2024, Rheumatology will be converting to a hospital-based outpatient clinic of Mary Washington Hospital,” read the message, which was signed by Daniel Woodford, medical director of Mary Washington Medical Group. “This means that the clinic will operate as an outpatient department of the hospital, not an independent physician office.”
With this change would come “changes to the way you are billed,” the message read. Patients would now see separate charges for medical services and “facility services.”
“Hospital facility services include the building overhead, supplies, support staff, and other technical services associated with your clinic visit,” the message stated. “Previously, you would have seen the facility and professional services combined on the same bill. This may impact your out-of-pocket responsibility (copay, deductible, coinsurance etc.) for your visit.”
The Advance spoke to a patient who said she was charged a $50 facility fee for a recent visit to Mary Washington Rheumatology. The patient said her insurance will not cover the facility fee.
The same language about facility fees appears on the website for the Internal Medicine Residency Clinic, which is part of Mary Washington Healthcare’s Graduate Medical Education program and is located at 1201 Sam Perry Boulevard in the Ambulatory Services Center.
“After you have an appointment at the Internal Residency Clinic, you will notice some changes to your bill. This clinic is a department of Mary Washington Hospital, which means you will see a facility fee in addition to the provider fee you’ve seen on previous bills. The facility fee will vary based on your plan with your healthcare insurer. In most cases, your insurer will fully or partially cover the facility fee.”
Mary Washington Healthcare (MWHC) operates a second residency clinic for family medicine at 12101 Carol Lane in Spotsylvania. Patients of this clinic will also see the facility fee on their billing statement, according to the website.
Mary Washington Cardiology at 1201 Sam Perry Boulevard and Mary Washington Maternal Fetal Medicine at 1300 Hospital Drive are also considered hospital departments, according to their websites.
Mary Washington Medical Group also includes behavioral health, dermatology, endocrinology, infectious diseases, urology, neurology, oncology, obstetrics and gynecology, orthopedics, pediatrics, and primary care practices.
The Advance asked MWHC how many of these practices are considered hospital departments, and how it determines which practices can charge the facility fee, but did not receive a response as of publication time.
The Insurance Information page of the MWHC website states that, “Depending on which location you visited, you may notice differences on your bill compared to another practice. The services you receive may be split into two separate bills to your insurance: a practitioner bill for professional services provided, and a facility bill for the use of equipment and resources. Depending on your insurance coverage, this change may also affect the amount of your co-pay or other out-of-pocket expenses.”
According to a 2023 article in the journal Health Affairs, the practice of hospitals charging facility fees is “growing in prominence.”
“These fees are ostensibly overhead charges, but for the hospitals and health systems that own these practice settings; the fees are not necessarily intended to cover costs specific to the setting or the patient being charged,” the article states. “Facility fee charges are becoming more common as hospital systems have accelerated their purchase of ambulatory settings and practices, leading to higher overall costs for outpatient care.”
According to information MWHC provides about hospital-based outpatient clinics, these facilities “follow stricter government rules, which can make things a bit more complex and costly.”
But as patients of Mary Washington Rheumatology recently learned, a visit to the same doctor in the same location for the same services can suddenly cost $50 more. For some patients, facility fees have added hundreds or even a thousand dollars to a patient’s bill, according to a 2021 article by KFF Health News.
A fact sheet published last year by the nonprofit Health Care Cost Institute found that patients pay significantly more when they are billed for both physician services and facility services.
For example, the average price of an office visit to a hospital-based outpatient clinic was $186, as compared to $118 for a visit to a physician-owned practice. The average cost of a biopsy at a hospital-based outpatient clinic was $791, as compared to $146.
The fact sheet notes that rather than improving the quality of the care patients receive, facility fees may “incentivize integration between hospitals and physician groups” because of the revenue-generating possibilities.
