September 19, 2013

The healthcare industry is undergoing a period of rapid consolidation as hospitals and health systems continue to acquire independent physician practices, free-standing ambulatory surgical centers and urgent care centers. In addition to raising the costs of healthcare, there is concern that acquired entities may not clearly disclose to patients their affiliation with the hospital or the fact that they will charge a separate – and often expensive – “facility fee.”

A facility fee is a charge levied by the acquired practice or the hospital that is intended to cover the overhead costs of the hospital. Such fees are in addition to the professional charges billed by the provider. In order to provide patients with meaningful notice of the fees and the cost of their care, Attorney General George Jepsen today announced his intention to propose legislation that will ensure that any fees are clearly disclosed in advance of care.

“Patients, as healthcare consumers, should have the ability to make fully informed decisions when seeking care,” said Attorney General Jepsen. “They deserve to know, in advance of any treatment or service, exactly what fees will be charged and for what services. It’s a matter of fundamental fairness, and it’s a significant problem for patients not only in Connecticut but across the country.”

Attorney General Jepsen will seek legislation – a Facility Fee Disclosure Act – during the General Assembly’s regular session next year requiring any off-campus hospital-based provider that charges a facility fee to disclose in writing the amount of a patient’s potential financial liability – including the specific amount of any facility fee.

Additionally, the Attorney General will propose that off-campus hospital-based providers prominently display written notices indicating that the office is part of a specified hospital and charges separate facility and professional fees. Such providers would be required to clearly hold themselves out to the public as being part of the main hospital.

“Often, a patient does not know that the physician they’ve relied on for years or the urgent care center they visited just a few months ago has been acquired by a hospital and that they will now potentially be subject to additional facility fees,” said Attorney General Jepsen. “Suddenly, a procedure that was one price during their last visit now includes a separate charge that adds hundreds if not thousands of dollars to their bill. Equally disturbing, the patient may not learn of the facility fees until they show up for their treatment or when the bill shows up in their mailbox.”

The Attorney General continued, “Over the next several months, I plan to seek more information from hospitals about their practices with respect to these facility fees. In addition, I will be reaching out to legislators and stakeholders to work on crafting legislation that will provide meaningful transparency and cost information to consumers.”

The 2014 regular legislative session convenes February 5.

The Attorney General’s Healthcare Competition Working Group – Assistant Attorneys General Charles Hulin, Thomas Ryan, Rachel Davis, Gary Becker and Richard Porter – under the direction of Assistant Attorney General Michael Cole, chief of the Antitrust and Government Program Fraud department, and Special Counsel Robert Clark are assisting the Attorney General with this matter.

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