Patients say hospitals should disclose emergency department facility fees

TARA BANNOW / February 22, 2022

Hospitals have taken heat for charging facility fees at their outpatient clinics.

The practice of doling out facility fees—flat rates that cover overhead—to emergency department patients is far less controversial. After all, it's well understood that staffing and equipping those high-intensity areas so they can provide around-the-clock care is expensive. Patients are cautioned to expect large bills.

But some emergency patients argue they should have at least been notified of the hospitals' practice of charging facility fees, especially because they often add several thousands of dollars onto the bill before any tests or procedures are factored in. The fees are typically based on a one-to-five severity scale, and which category a patient falls into isn't determined until the end of a visit.

"The vast majority of people going into an emergency room don't have any expectation to pay for anything other than the services they receive," said Jared Lee, a managing partner with Jackson Lee in Florida who has brought several lawsuits on behalf of ED patients contesting facility fees. In an ongoing case Lee is not involved in, a $4,000 facility fee comprised over half the patient's bill.

A flurry of lawsuits in recent years have argued this point, so far apparently without success. Several were filed in Florida, the state with the highest ED facility fees. In Florida, median ED facility fees range from $596 for the most minor problems to $3,662 for the most severe, according to a new report from Hospital Pricing Specialists that relied on fiscal 2021 claims data.

Florida hospitals with the highest ED facility fees charge $6,700 for the most severe cases.

Even though Florida has the highest median ED facility fees, HPS' report shows some states' top fees far exceed those in Florida. In Alaska, the most expensive hospitals charge just shy of $15,000 in the most severe cases. In Colorado, that's almost $13,000.

"All of these fees are taxes on being sick," said Alan Sager, professor of health law, policy and management in Boston University's School of Public Health. "They're the most regressive tax in the whole world."

Even if you don't have to, should you?

Even if the plaintiffs don't prevail, the lawsuits raise the question of whether hospitals should inform patients about their practice of charging ED facility fees even if they're not legally required to. Patients wouldn't know which category they would fall under, but they would at least see the range of charges. This is where it gets complicated.

Many patients enter the ED from an ambulance unconscious or in shock, and couldn't switch hospitals even if they objected to the fee.

"In an emergency situation, our ability to be good consumers is eroded," said Maureen Hensley-Quinn, senior program director of coverage, cost and value with the National Academy for State Health Policy. "I don't know that disclosure of some of these fees would help the consumer make a better decision, particularly if they're in a terrible accident where an ambulance is bringing them in."

Boston University's Sager argues the inability to be a good consumer in the ED makes it even more important that hospitals be transparent about their fees.

"Hospital emergency rooms should offer extraordinary protection for people who are sick or injured," he said.

But countless other patients wait hours to be seen in EDs and could consider the fees. Data show people routinely use EDs for non-emergency conditions. In those cases, Community Catalyst's Mark Rukavina said he thinks there should at minimum be signage in the department letting patients know about the fees.

"Not everyone is coming in on an ambulance unconscious," said Rukavina, a program director overseeing Community Catalyst's Community Benefit and Economic Stability Project. "It seems like a good practice would be to post information and at least give people some notice that there is a fee just for stepping into the emergency department."

Hospitals and attorneys, however, have argued they're forbidden from disclosing their facility fees by a longstanding federal law that requires hospitals to treat anyone who comes to their EDs regardless of ability to pay. The Emergency Medical Treatment and Labor Act precludes any discussion of patient financial responsibility until after the patient is screened and stabilized.

"If it's a true emergency, there's no time to inform you," said Isabelle Bibet-Kalinyak, an attorney in Brach Eichler's healthcare law practice. "They just treat you and talk about the cost afterward. That's your duty as a provider."

States have taken interest in regulating facility fees in recent years. Connecticut's law is particularly strict in that hospitals must notify patients of their facility fees even in emergency settings in addition to nonemergency ones. It's unclear what that disclosure looks like in practice, though, since most hospitals contacted would not share their protocols.

Connecticut hospitals make their facility fees available on their websites, although it sometimes requires downloading an Excel spreadsheet. At Hartford HealthCare's flagship hospital, ED facility fees range from $925 to $3,943. At Nuvance Health's Norwalk Hospital, the spread was $689 to $3,158. Hartford said signage in its EDs inform patients that they "may incur a financial liability greater than you would incur if this facility was not hospital based."

State data show Connecticut's hospitals collected $358.5 million in facility fees in 2020, down from $417.9 million in 2016. Stamford Hospital collected the most of any hospitals in the state: $93 million in 2020. Stamford declined to share how it discloses its ED facility fees. Its website features a downloadable "Cost Estimator Tool" but that does not show ED facility fees. Yale New Haven Hospital was the second highest at $38 million. The academic health system also declined to comment.

The federal No Surprises Act, the new law that bans surprise billing, applies to hospital facility fees, so out-of-network hospitals can no longer balance bill patients for their facility fees. However, that protection only applies to patients with health insurance. Self-pay patients are still exposed to the fees in full.

Online chargemasters not enough

One of the lawsuits was filed by Patricia Young, who went to the ED at Bravera Health Brookesville, a Florida hospital owned by for-profit Community Health Systems, after a bike accident in 2019.

Young's $4,000 facility fee was 52% of her total bill. Had she known about CHS' practice of charging facility fees when she signed her intake form, her complaint says she would have gone to a different hospital. This particular hospital's facility fees range from $951 to $6,025.

"Defendant's practice is to intentionally conceal its ER Visitation Fee from patients until after services have been rendered," the complaint says. Young's attorneys did not respond to requests for comment.

The lawsuit argues the hospital violated Florida's Deceptive and Unfair Trade Practices Act and its price transparency statute, among others. CHS is urging the judge to dismiss the case, arguing the practice is governed by federal law, which in this case is the Centers for Medicare and Medicaid Services' price transparency law requiring hospitals to post online machine-readable files of their chargemaster rates.

Bravera Health posts chargemaster rates for all its hospitals, but it is difficult to decipher what constitutes ED facility fees. CHS clarified in a court filing that they range from $391 for "TRIAGE ONLY" to $6,424 for "CRITICAL CARE LT 74M." In between, there's "CRIT CARE EA 30 MIN," "CRITICAL CARE LT 74M" and COMPREHENSIVE ED VST." In other words, the keyword search "emergency" would be useless.

"There's no real and practice disclosure of that fee simply by being in that potential list of charges," said Lee, the Florida attorney.

Franklin, Tennessee-based CHS, which declined to comment, also called Young's lawsuit a "copycat case" and noted that a number of identical cases had already been dismissed in Florida, Texas, Mississippi and Virginia. The health system added that since it had already stopped pursuing the balance on Young's bill, she no longer had standing to bring a case.

Young's complaint doesn't say whether or not she had health insurance, which would usually cover at least a portion of the facility fee.

Meanwhile, CHS has been expanding its emergency department services. In addition to its 83 hospitals—11 of those in Florida—the company operates 17 freestanding emergency departments, including three that opened in 2021.

Some hospitals make their ED facility fees easier to find online than others. But realistically, no one is going to look up that information before going to an ED, said Rick Gundling, vice president with the Healthcare Financial Management Association, a trade group for healthcare finance executives. Knowing that, HFMA recommends hospitals inform patients about their facility fees in another way, such as signage, on their intake forms or—better yet—verbally.

Gundling said such notification would not violate EMTALA, the federal emergency treatment law, so long as the patients are screened and stabilized first.

"The best practices are to let people know what their financial obligations are as soon as possible in the treatment," he said. "Obviously you're triaged, immediate care is provided, but at that point you should be able to be told even within your time there. That's the ideal."