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According to a report from Attorney General George Jepsen, 22 of the state’s 29 hospitals are now charging separate facility and professional fees along with services at their newly acquired outpatient departments or clinics.

Facility and professional fees, which can range from $100 to $1,000, are separate from a patient’s co-pay and they often take patients by surprise. Although hospitals have always charged facility fees for the use of the hospital itself, Jepsen’s report identifies the relatively recent phenomenon of hospitals charging patients such fees for services rendered in offices they own outside the main hospital building. This means that as more previously independent clinics and physicians are acquired by hospitals, more patients are charged hospital facility fees.

Facility fees can be expensive, surprising and confusing for patients, which is why Jepsen’s office undertook its review. Jepsen said his office has fielded about 70 complaints from consumers who have been charged these fees.

The complaints are similar. A patient goes to a dermatologist office for a routine skin biopsy and is charged $390. The office is close to a hospital and the patient has been going there for years. She is unaware the practice was acquired by the hospital, so when she returns for the same procedure she’s surprised that she’s asked to pay a $170 facility fee.

Jepsen’s review of the facility fees found that 12 hospitals notify all patients to expect two separate fees for their medical services. Another 13 hospitals reported that they only provided notice of facility fees to Medicare patients, and four said they notified uninsured or “self-pay” patients of the additional fee. Seven hospitals told Jepsen’s office they did not provide any notice of a facility fee to their patients. Only one of the 29 hospitals surveyed included the existence of separate billing for the hospital and physician fee in a patient brochure.

Of the hospitals or practices that do provide a notice of the fee, most provided the information at the time the patient arrives and some provided the information in advance if a patient made an appointment far enough in advance.

A few of these notices were in plain language and on colored paper or bullet-pointed to help patients understand they would be charged two separate fees, the report found.

“However, none of the hospitals that were willing to provide patients with notice of the precise amount of potential liability for separate facility and professional fees or even a best estimate, would do so unless specifically requested by the patient,” the report stated.

And even though hospitals provided photographs of outdoor and indoor signs and websites identifying that the outpatient facility was part of the hospitals, “the extent to which consumers understand the signage is determined by its content and placement.” The report concluded that most of the patients were unaware of the facility fees.

“Several hospitals acknowledged the need for greater patient information and expressed their willingness to examine their facility fee policies, to their credit,” Jepsen said. “However, I strongly believe that this year’s legislation is important to ensure that all patients receive adequate notice, prior to treatment, so they can make informed choices about their health care and about whether or not to visit a practice that charges facility fees.”

The legislation concerning facility fees was approved by the General Law and Public Health Committees and is awaiting action in the House. The legislation is supported by the Connecticut Hospital Association.

Connecticut hospitals support efforts to make pricing more transparent, and agree that when seeking a physician, patients should not be surprised to learn after the fact that they are being treated at a hospital, or that they will receive two bills and the facility fee covers a portion of the hospital’s ongoing operating expense, Michele Sharp, a spokeswoman for the Connecticut Hospital Association, said Wednesday.

In January, the Connecticut Hospital Association’s Board of Trustees unanimously adopted a recommendation that all Connecticut hospitals provide patients with information about facility fees in advance of their treatment. Specifically, it recommended that all Connecticut hospitals voluntarily adopt changes to improve pricing transparency.

Jepsen said he would like to see the legislation passed to mandate the disclosure of these fees.

Jepsen is also supporting legislation concerning greater transparency in physician acquisitions. That bill passed the Public Health Committee and is awaiting action in the Senate.

Advocates and labor unions concerned about the potential conversion of nonprofit hospitals to for-profit hospitals credited the report as making yet another strong and compelling case for increased regulation and oversight of the rapidly-changing hospital industry.

But they went further than the attorney general and recommended the passage of three more bills. In addition to the two bills highlighted by Jepsen, advocates and labor unions would like to see the legislature tackle the following: Senate Bill 460: An Act Concerning Hospital Conversions and Other Matters Affecting Hospitals, House Bill 5257: An Act Concerning Hospital Employees and Hospital Conversions, and House Bill 5384 : An Act Concerning Reports of Nurse Staffing Levels
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“The Attorney General’s report sheds light on serious issues that must be addressed before any for-profit takeovers,” Tom Swan, executive director of the Connecticut Citizens Action Group, said. “And these are just the tip of the iceberg. We can’t let Wall Street profiteers run our health care system. State legislators have to act now to protect quality care for patients, caregivers and communities.”