March 6, 2014

Attorney General George Jepsen today testified in support of legislation he authored seeking greater disclosure to patients of hospital facility fees. Over the last several months, he testified, nearly 70 complaints have been filed with his office from Connecticut patients who were surprised to learn that the medical services they received at a physician’s office had triggered a hospital facility fee.

At the Legislative Office Building, Attorney General Jepsen told members of the General Assembly’s General Law Committee that patients have reported that they often left their doctor’s office believing their payment at the time of service had settled their financial obligation only to later receive a bill including facility fees that ranged from hundreds to thousands of dollars.

The Attorney General expressed his support for legislation currently before the committee – House Bill 5337, An Act Concerning Fees Charged for Services Provided at Hospital-based Facilities – that would provide greater disclosure potential facility fees to patients prior to treatment or service.

Attorney General Jepsen’s proposed legislation is the product of extensive study by his office’s Healthcare Competition Working Group, which reviewed complaints and input from consumers as well as detailed information provided by all 29 of Connecticut’s hospitals concerning their practices with respect to facility fees.

“This bill seeks to address an increasingly common and significant issue confronted by patients seeking medical care from physicians whose practices are owned or operated, in whole or in part, by hospitals or health systems,” said Attorney General Jepsen. “Patients are frequently surprised when charged a separate hospital fee for care they receive from these hospital-affiliated providers. This bill would require such providers to provide patients with clear notice that they may be liable for two separate charges when receiving medical care – one for ‘professional services’ rendered by a healthcare provider and another for the administrative and overhead costs of the hospital that owns or operates the physician practice where care is received.”

A facility fee is a charge levied by the acquired practice or the hospital that is intended to cover the overhead costs of the hospital. Such fees are in addition to the professional charges billed by the provider. Last year, Attorney General Jepsen announced his intention to seek legislation to improve consumer protections related to facility fees and asked for information from patients as well as the state’s hospitals about the fees, including how they were applied and any disclosures already in place.

“The disclosure of actual patient liability, or a best estimate of the actual amount due, varied greatly depending on the hospital involved, and even varied within single hospital systems,” Attorney General Jepsen said. “With respect to when Connecticut’s hospitals provide notice of a separate facility fee, most noted that they provided such notice at the time the patient arrived for their scheduled medical service. The responses we received from hospitals, as well as the number and nature of consumer complaints we received, led me to believe that legislation is necessary to ensure consumers are getting the information they need to decide whether or not to visit a practice that charges facility fees.”

The General Law Committee has until Tuesday, March 18, to take action on the bill. The 2014 legislative session adjourns on Wednesday, May 7.

The Attorney General’s Healthcare Competition Working Group – Assistant Attorneys General Charles Hulin, Thomas Ryan, Rachel Davis, Gary Becker and Richard Porter – under the direction of Assistant Attorney General Michael Cole, chief of the Antitrust and Government Program Fraud department, and Special Counsel Robert Clark are assisting the Attorney General with this matter.

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