There is a loophole in the No Surprises Act: it doesn’t cover facility fees. A “facility fee” is an upcharge that hospitals – mostly in midscale and upscale markets that see a lot of commercially insured patients – tack onto itemized ER bills. There are two competing explanations for these fees. Hospitals add them:
Because they need to cover the cost of nursing staff, technology, construction, and administration; vs.
Because they can.
As to the first, you might ask: “Um, isn’t that what the 1000% markup on scans, Advils, IVs etc. supposed to cover?” Silly you! Of course not. It’s exactly the opposite – those markups are to cover the cost of administration, construction, technology, and nursing staff.
Facility fees have been rising far faster than other costs – 531% since 2004, according to BenefitsPro. BenefitsPro just published an article on this topic, and we would encourage you to read it.
For our purposes, the article’s key sentence (boldface ours) is:
Facility fees collect a revenue stream for hospitals to meet regulatory standards, including federal requirements for emergency departments to remain open 24/7 and provide care to everyone, regardless of ability to pay.
That boldfaced point, of course, is the excuse hospitals use to negotiate sweetheart deals with payors. (In all fairness to payors, they usually get much better deals on electives, because their members can shop around, and because hospitals can’t use that excuse. Sometimes those deals are better than Medicare’s.) Not turning patients away because you don’t like their form of payment is the core requirement of the Emergency Medical Treatment and Active Labor Act of 1986 (EMTALA).
There is some irony in the unfortunate fact that designated "safety net" hospitals – those that see a lot of Medicare and Medicaid patients and are required to treat all comers – rarely charge significant facility fees and in any event don't have enough commercially insured patients to make it worth their while.
And the envelope please…
Along with the hospitals themselves, the winner in this strategy is Quizzify2Go. Turns out the exact same EMTALA law which hospitals use as an excuse to constantly increase prices for non-elective care can be used to reduce them.
You’ve likely seen our 2x Medicare “ER Sticker Shock Prevent Consent.” You may not have seen the latest iteration. It's a wallet sticker, that looks like this, with instructions and a QR code for more information>
This sticker eliminates the need for employees to have to write anything into the form consent they are offered. All they do is ask to print it out, and then apply it:
Every time a hospital raises their facility fee, the savings from the Consent increases. That’s because Medicare doesn’t recognize facility fees, so our 2x Medicare rate does not go up just because the hospital wants it to.
However strong the argument already was for the Quizzify Prevent Consent, each increase in the facility fee makes it that much stronger. So if you aren't already a Quizzify customer, now is the time to become one.