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A Little Known Charge on Medicare Bills (Guest: Devon Herrick)

April 1, 2019

Few patients realize that hospitals can charge Medicare “facility fees” when patients visit health care providers on hospital campus grounds or in a hospital-owned practices. Medicare is more expensive than many patients think.

Few Medicare patients realize “facility fees” until they scrutinize their Medicare billing statements. Facility fees have nothing to do with medical care. Congress has authorized hospitals to charge “facility fees’ for cost of operation on hospital campuses or in doctor practices owned by hospitals. Hospitals are rapidly buying up private practices so Medicare patients will start noticing fees even more.

Devon Herrick, health care economist and policy advisor to The Heartland Institute explains how and why facility fees exist and how this is another troublesome sign if lawmakers were to expand Medicare. Recently, Congress eliminated “facility fees” but only to new hospitals. One patient describes her personal situation in which the fees cost her $414 out of pocket in one year. She only noticed the fees when she spent hours trying to make sense of her billing statements.

Devon Herrick, Ph.D., worked for the National Center for Policy Analysis (NCPA) until it ceased operations in July 2017. He is a policy advisor to The Heartland Institute. @DevonHerrick
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland's monthly newspaper for health care reform. @HCPolicy