Hospitals charging facility fees for telehealth visits

Kaiser Health News reported on a patient who was informed that she would be billed for a facility fee after she opted for a telehealth visit. Hospitals have argued that they should get to charge more because it is expensive to maintain emergency services that might not be used. However, the facility fee has come under additional scrutiny when hospitals have acquired physician practices and charged facility fees when such practices did not charge them before. Applying facility fees to telehealth visits (which need not be done from hospitals) raises the level of controversy.

An executive at the health system that the patient made an appointment with argued that applying facility fees to telehealth visits would be justified because they still need to maintain their services. (The executive also said that the facility fees offsets the cost of the software for telehealth visits, but smaller physician practices would also need to incur such costs, so that would not be a reason that hospitals exclusively should be entitled to a facility fee.) Hospitals would likely point out that especially given the pandemic, their mix of telehealth visits compared to in-person visits has changed drastically.

However, allowing hospitals to charge an additional facility fee for services that do not actually use the facility seem to privilege them over their non-hospital competitors. A negative consequence is that doing so would likely encourage industry consolidation (such as the purchasing of smaller practices), which tends to lead to higher prices. A fairer approach might be to pay the hospitals a fixed amount for being available to provide emergency services, or only allowing hospitals to charge a facility fee for emergency services.