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October 6, 2020

Hospital ‘facility fees’ reach high of $437 million

Photo | Wikimedia Commons St. Vincent's Medical Center in Bridgeport reported a nearly 2,800% increase in facility fees for 2019, but had the ninth highest overall fee total among Connecticut hospitals, according to the Office of Health Strategy.
By Matt Pilon

Additional fees levied on insurers and patients for health services provided in hospital-owned facilities in Connecticut increased by more than 3% last year, reaching their highest level since the state began tracking the charges in 2015.

So-called “facility fees” in calendar year 2019 totaled $437.2 million, up from $422.9 million in 2018, which was the prior high, according to new data provided by the Office of Health Strategy.

The total has increased in three of the last four years, OHS reports show.

Concerned about the effects of hospital system consolidation, legislators passed a law in 2014 directing OHS to begin reporting on the fees charged by hospital-owned outpatient facilities.

The number of patient visits subject to a facility fee in 2019 rose 11.4%, to 1.2 million visits.

Out of 25 hospitals included in the report, 16 reported higher facility fee revenue last year. The highest totals were at Stamford Hospital ($103 million) followed by Yale New Haven Hospital ($55.1 million) and Hartford Hospital ($43 million).

St. Vincent’s Medical Center had the highest year-over-year increase, growing from just over $526,000 in 2018 to $15.2 million in 2019. OHS said the increase was due to a greater number of St. Vincent's-owned facilities charging a facilities fee in 2019. There were eight facilities doing so last year, up from three in 2018. In addition, some of those facilities saw a significant increase in revenue in 2019.

Hartford HealthCare acquired St. Vincent's in late 2019.

The largest decrease was observed at Nuvance Health’s Danbury Hospital, where fees fell by just over 50%, to $10.9 million. OHS said the decrease was the result of a Nuvance-owned surgery center in Ridgefield not reporting facility fee revenue in 2019. 

Across the state, digestive-system and cardiovascular procedures were the two categories of health services that generated the most fee revenue.

Commercial and employer health plans were billed 60% of the total amount of facility fees last year. The average fee for a privately insured patient was $426, which was exactly twice that of the average fee billed to a Medicare patient. Meanwhile, the average fee to the Medicaid program per patient was $147, OHS said.

It’s not clear from the report what portion of the facility fees commercially insured patients ended up paying compared to their insurer. 

This story has been updated to include additional information from OHS.

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