Health Watch USA Logo Outpatient Service Facility Feel


July 2018 CMS Calling for Comments Regarding Same Payment Regardless of Location of Service: P639-640:  "We are concerned that challenges continue to exist for patients due to insufficient price transparency. Such challenges include patients being surprised by out-of-network bills for physicians, such as anesthesiologists and radiologists, who provide services at in-network hospitals and other settings, and patients being surprised by facility fees, physician fees for emergency department visits, or by fees for provider and supplier services that the beneficiary might consider to be a part of an episode of care involving a hospitalization but that are not services furnished by the hospital".   View Report

Kansas City Star:  Facility Fees Day 2: ‘Facility fees’ add billions to medical bills
“It doesn’t make sense,” said Kevin Kavanagh, a retired surgeon and chairman of the patient advocacy group Health Watch USA. Either hospitals are making extra money by charging facility fees, or they’re operating far less efficiently than a doctor’s office can, Kavanagh said. In either case, facility fees “are extremely expensive to the health care system.” The fees may be one of the primary factors driving physicians out of private practice and into hospital employment, Kavanagh said. “You can’t compete against an entity paid almost twice as much as you are.” 
Read more at:  Bavley A. Day 2: 'Facility fees' add billions to medical bills. Kansas City Star. Feb. 17, 2014. 

Health Watch USA has been a national leader in the issue of facility fees charged to patients for Outpatient services they used to receive from an independent doctor.   Below are some Op-Eds and news reports which Health Watch USA has contributed to:

Actions by MedPAC & CMS Regarding Facility Fees:

  • Jul. 14, 2016.  CMS Issues Final Rule on Outpatient Facility Fees.  Restricts use to on-site outpatient services, but grandfathers in existing off site facilities.  Download Document
  • Nov. 2, 2015.   Bipartison Budget Act Revises Facility Fee Outpatient Billing.   Regulations to implement the changes still need to be written by CMS.   Download Document
  • Apr. 17, 2014.  OIG Dept of Health and Human Services
    Medicare and Beneficiaries could save billions if CMS reduces hospital outpatient department payments rates for ambulatory surgical center-approved procedures to ambulatory surgical center payment rates. " In addition, Medicare could generate savings of as much as $15 billion for CYs 2012 through 2017 if CMS reduces outpatient department payment rates for ASC-approved procedures to ASC payment levels for procedures performed on beneficiaries with low-risk and no-risk clinical needs" Download Report 

  • Mar. 2014.  Medpac Report on Facility Fees.  Download Document 

  • Jul. 19, 2013.  CMS Proposes to Study Facility Fees:
    "Upon acquisition of a physician practice, hospitals frequently treat the practice locations as off campus provider based departments of the hospital and bill Medicare for services furnished at those locations under the OPPS."
    "When a Medicare beneficiary receives outpatient services in a hospital, the total payment amount for outpatient services made by Medicare is generally higher than the total payment amount made by Medicare when a physician furnishes those same services in a freestanding clinic or in a physician office."

  • Oct. 4, 2012.  MedPAC  Addressing Medicare payment differences across settings:  Ambulatory care services.  Oct. 4, 2012.    "E.g., rate for laser eye procedure is 90% higher in outpatient department (OPD) than physician's office."    HW USA Copy of Presentation

  • Mar. 26, 2012.  MedPAC Clarification on Report (HW USA Enquiry)  View Clarification 
  • Mar. 2012.  Medicare Payment Policy,  Report to the Congress. 
    Paying the same for the same service in different sectors (pXIV)
    "The Commission maintains that Medicare should seek to pay similar amounts for similar services, taking into account differences in the definitions of services and patient severity. Under current payment systems this is not always the case. For example, in 2011, Medicare paid 80 percent more for a 15-minute office visit in an OPD than in a freestanding physician office. This payment difference creates a financial incentive for hospitals to purchase freestanding physician offices and convert them to OPDs without changing their location or patient mix. Indeed, E&M clinic visits provided in OPDs increased 6.7 percent in 2010, potentially increasing Medicare program and beneficiary expenditures without any change in patient care. Beneficiary cost sharing is substantially higher when E&M office visits are billed as OPD visits, and beneficiaries’ Part B premiums increase as services shift to OPDs due to higher OPD rates."    HW USA Copy of Report  

  • Jan. 13, 2012.  Health Watch USA Comment on MedPAC recommendations.   View Comment
  • MedPAC Presentation on Facility Fees 1/12/2012 to 1/13/2012.
    According to the MedPAC presentation mid level doctor visits are 80% higher in a hospital outpatient setting as compared to a free standing doctors office. With the large employment of physicians by hospitals, this has resulted in a huge loss of Medicare Dollars (see enclosure). (Click on Slide to Enlarge)
    For more information go to the MedPAC Meeting Site for Jan 12, 2012:

  • Jul. 14, 2011.  HW USA Enquiry to MedPAC Regarding Facility Fees   View Enquiry