Consumers Are Paying More For ER Facility Fees

By Consumers for Quality Care, on December 6, 2017

The latest installment of Vox’s series on hospital billing and prices examines the monopoly powers of emergency rooms and how consumers are hurt by facility fees.

Nearly all emergency room bills include a facility fee, a charge that is applied just for seeking care. According to Vox:

Emergency rooms argue that these fees are necessary to keep their doors open, so they can be ready 24/7 to treat anything from a sore back to a gunshot wound. But there is also wide variation in how much hospitals charge for these fees, raising questions about how they are set and how closely they are tethered to overhead costs. 

Most hospitals do not disclose their facility fees, which can reach hundreds of thousands of dollars. Instead, consumers only learn of these costs after they receive their bill and long after they have been treated. The price that is billed is dependent on a billing code, which is usually coded on a 1 to 5 scale. When a patient enters the ER, the case is judged by complexity and the score is coded.

A new Vox analysis reveals that emergency rooms all across the country are increasingly using these higher-intensity codes, and that the price of these codes has increased sharply since 2009.

Vox and Health Care Cost Institute analyzed 70 million emergency room bills, looking at the bills’ facility fees. They found that between 2009 and 2015, the price of facility fees rose 89%. While the number of emergency room fees billed has declined 2%, the overall spending increased by $3 billion.

“It is having a dramatic effect on what people spend in a hospital setting,” says Niall Brennan, executive director of the Health Care Cost Institute. “And as we know, that has a trickle-down effect on premiums and benefits.”

Additionally, the data indicates that emergency rooms are using higher billing codes more often.

The rising price of emergency room facility fees coupled with growing usage of the most expensive codes mean it’s significantly more expensive to go to an emergency room now than it was six years ago.

Hospitals argue that they are treating an aging population and the uptick in more complex cases is genuine. However, experts point to hospitals’ extreme market power.

“If you have a monopoly — and when it comes to the ER, it’s a monopoly — you can set any price you want,” says Robert Derlet, a professor emeritus in emergency medicine at the University of California Davis, who has been critical of ER billing in the past.

“What is going to deter me from increasing my price? Who can stop me? If I’m the financial officer for the hospital, I might even get a bonus for doing this.”