Colorado lawmakers look to crack down on hidden "facility fees" by hospitals

When you go to an outpatient clinic, you expect to be charged for the care your receive, but many patients are also being charged what's called a facility fee.

Some describe it as a fee to simply walk in the door. It's on top of the physician's fee and can run in the hundreds, even thousands, of dollars. Most patients don't even know about it until they get their bill and find out their insurance may not cover it.

"Called my insurance and that's the first time I heard about facility fees - that a hospital because they own the outpatient clinic, gets to bill you simply because they own the building," said Diane Kruse of Conifer.

When her husband needed to see a heart specialist, she did her homework by making sure the doctor and facility were in network, her co-pay was capped, and there would be no surprises. So, when the bill came and there were two charges for office visits, she thought she'd been double billed, "It's mindboggling."

In her case, the facility fees ran between $156 and $195, per visit. Insurance didn't cover them and she didn't find out about them until her husband's fourth visit.

"I said how are you supposed to know this they said 'you have to ask' and I said, 'that's absurd, how you ask something you no knowledge of?'" she said.   

She's hardly alone.

Isabel Cruz with the Colorado Consumer Health Initiative says, some people are being charged facility fees when they don't even step foot in a facility. 

"We've seen consumers charged $800 for telemedicine facility fee," she said. 

Cruz says as big hospital systems buy up outpatient clinics, facility fees are becoming commonplace. A bill at the state capital would eliminate them in most cases and require notification when they are charged.

"This bill the potential to destroy the outpatient care model that have existed in Colorado today," said Julie Lonborg with the Colorado Hospital Association.

She says the bill would mean a loss of $9 billion for hospitals.  

Facility fees she says, pay for almost everything at an outpatient facility but the doctors - from nurses and equipment to housekeeping and heating bills. 

"My Xcel bill is high. Hospitals' Xcel bills are high. Labor costs are up 20%. Our supply expenses are up double-digits," she said.

Cruz suggests facility fees are simply a sneaky tactic hospitals use to boost profits.

"There are ways of recouping costs and doing business beyond facility fees," she said.    

Diane Kruse agrees. 

She says other outpatient clinics don't charge facility fees. Hospitals, she says, can make do without them too. 

"They're trying to scare people," Kruse said. 

She says she's not falling for it and neither should anyone else. 

"Go to a place that doesn't charge a facility fee and thank them for not padding their pockets," she said.    

The bill is aimed at large hospital systems in the metro area and bill sponsors are considering a carve-out for small rural hospitals.