Patients Pay Higher Out of Pocket Expenses: Using Hospital Owned Medical Practices

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By Linda Ziac of The Caregiver Resource Center

Hospitals continue to purchase medical practices (physicians’ practices, surgery centers & urgent care centers); raising patient out of pocket costs.

Have you noticed that hospitals have been buying physician practices, surgery centers and urgent care centers in CT and around the country?

Why should you care?

Have you been to your doctor lately?
As more hospitals are acquiring physician and healthcare practices, patient routine appointments with physicians are in many cases being billed as hospital outpatient visits. The end result is that you are likely paying more money for services now, than you did when the physician was in private practice.

In an example presented by the Medicare Payment Advisory Commission – “A routine appointment billed for a Medicare beneficiary’s physician office visit in 2011 cost Medicare $68.97.”

“If the patient is billed for the same appointment as a hospital outpatient department, Medicare would pay $124.40, or 80% more. As a result, the patient would face higher out-of-pocket costs.

Facility Fee
Another charge that is commonly being added to a patient’s bill for a hospital owned practice is referred to as a “facility fee.” If a hospital owns a facility or the equipment that is used by the practice, hospitals have the ability to add a second fee or facility fee, which the hospital says is billed to help cover overhead costs of the practice.

Up until this time, hospital owned medical practices were not required to notify patients that the medical practice is owned by a hospital, they are being charged for services as a hospital outpatient, or that they are being billed for an additional facility fee.

All that will change on October 1st when a New CT Law – Public Act No. 14-145 “An Act Concerning Fees Charged for Services Provided at Hospital Based Facilities” is scheduled to take effect.

New CT Law – Effective October 1st
Starting Oct. 1, 2014, the new law will require medical practices owned by hospitals and healthcare systems to notify patients in advance of receiving services that the practice is owned by a hospital, patient services will be billed as outpatient services, or that there will be an additional facility fee added to their bill.

A Summary of Public Act No. 14-145
According to the CT general statutes, this act requires a hospital or health system to notify individual patients and the public that it charges a facility fee for outpatient services.

The facility providing the service (hospital-based facility) must notify a patient in writing (1) that the facility is part of a hospital or health system that charges a facility fee, (2) about the patient’s potential financial liability, and (3) that the patient should contact his or her health insurance company for additional information.

The specific content of the notice depends on the facility’s billing system, and the deadline for sending the notice depends on when the patient’s appointment is made.

The patient notice requirements do not apply to Medicare or Medicaid patients or those receiving services under a workers’ compensation plan.

The act also requires a hospital-based facility to (1) prominently display a sign indicating it charges a facility fee and (2) market itself as a hospital-based facility.

Under the act, a “facility fee” means any fee a hospital or health system charges or bills for outpatient hospital services provided in a hospital-based facility that is (1) intended to compensate the hospital or health system for its operational expenses and (2) separate and distinct from a professional fee, which is any fee charged or billed by a provider for professional medical services provided in a hospital-based facility.

A “health system” is (1) a parent corporation of one or more hospitals and any entity affiliated through ownership, governance, membership, or other means or (2) any entity affiliated with a hospital through ownership, governance, membership, or other means.

Be Your Own Advocate
In order to ensure that you have all the information you need prior to meeting with a physician or other medical professional you may find the following guidelines helpful.

When making an appointment or utilizing any medical services you may want to:

  • Inquire about the ownership of the practice, and if the practice is owned by a hospital or healthcare system.
  • If the practice is owned by a hospital or healthcare system, ask if you will be charged as an outpatient for the services that you will receive.
  • Ask if you will be charged a facility fee in addition to the physician fees, lab work, etc.
  • If a facility fee is to be charged, ask if the physician or medical provider has another office location that is not owned by a hospital.
  • Research area surgery centers, urgent care centers and walk in clinics to see if they are hospital owned, prior to you needing their services.
  • Call your insurance company in advance, to ask how much coverage will you receive, if you use a hospital owned medical practice.

Ask an insurance representative to help you explore and compare other medical provider options that are available in your plan, that are not hospital owned.

To read the full text of Public Act No. 14-145 “An Act Concerning Fees Charged for Services Provided at Hospital Based Facilities” click here.

The information in this article is provided as an information resource only, and is not to be used or relied on for any diagnostic or treatment purposes. This information is not intended to be patient education, does not create any patient provider relationship, and should not be used as a substitute for professional diagnosis and treatment.

Please consult your health care provider for an appointment, before making any healthcare decisions or for guidance about a specific medical condition.


Linda Ziac is a lifelong resident of Greenwich and the owner and founder of The Caregiver Resource Center. Linda founded her company in October 1990, and provides concierge case management and advocacy services for seniors, people with special needs and families.

Linda’s professional career spans 39 years in the health and mental health field as a CT Licensed Professional Counselor, CT Licensed Alcohol and Drug Counselor, Board Certified Case Manager, and Board Certified Dementia Practitioner.

Linda’s role is to work with the client, their family and healthcare professionals to help assess, plan for and implement ways to allow for their greatest degree of health, safety, independence, and quality of life. Linda is often asked to help when a person is taken to the ER, is in the hospital, or there is a need to help assess and implement a plan to address a person’s day to day needs.

This process involves identifying a client’s abilities and needs, and helping to design a care plan (road map) that is composed of a spectrum of services, that best meets the unique needs of that particular client. A client and their family select the services that they want, and they only pay for those services.