New report shows state pathways to end hospital billing abuses stemming from consolidation

‘Facility fees’ raise prices for patients and insurers, but states are finding solutions.

AUSTIN, Texas – Health care consolidation means more expensive bills for patients, not only because of higher prices, but also because of added facility fees — extra charges that patients usually have to pay for out-of-pocket that help big health care companies line their pockets. TexPIRG Education Fund’s new report, Outpatient outrage: Hospitals charge fees for care at the doctor’s office, released Tuesday, dives into why more Texans are seeing facility fees on their medical bills, even if they didn’t get treated at the charging facility. The report calls on states to ban these fees and take intermediary steps to protect patients by collecting data and ensuring patients know about these potential charges before getting care.

“Just like any other bill, the price of your medical care should reflect the services you received. Health care facilities too often overcharge patients just because they can,” says TexPIRG Education Fund’s health care advocate, Maribeth Guarino. “Sometimes these are billing errors, but often, they’re intentional, additional fees that don’t reflect any direct services rendered. These seemingly random charges can confuse patients and make them worry about the uncertainty of medical costs.”

Facility fees cost anywhere between a few dollars and thousands of dollars, and are seemingly arbitrary. They can stem from a change in facility ownership rather than any change to medical care, and as one Texas patient who the report mentions discovered, they can be hard to avoid when provider choice is limited due to geography or market consolidation. In Connecticut, the state with the best data on the issue, total facility fee revenue in 2021 was more than $400 million dollars — around $400 per patient visit.

While some federal proposals address facility fees, so far, only state legislatures have taken concrete steps to curb this issue. Fifteen states have passed some form of legislation to restrict facility fees, collect data or educate patients about these fees. Texas has a very limited ban and some notice requirements, so patients aren’t taken completely by surprise when facility fees appear on their bill. Still, more needs to be done to protect patients and fix these billing practices. 

“Patients should only pay for the benefits they get, and providers need to be transparent about the fees they charge,” Guarino said. “Texas should put an end to extraneous charges that have no relation to the care or treatment received.”

###