Michigan’s biggest hospitals won’t say how much they collect in facility fees

The Michigan hospital industry says its hospitals rely on facility fees to survive
Bridge asked: How much? The 10 largest Michigan-based health systems refused to say
That’s a problem, said the chair of the Michigan House Committee on Health Policy

Michigan’s 10 largest hospitals won’t disclose how much they collect in facility fees — charges the industry says are crucial to their survival.

That’s a problem, said the lawmaker who wants to limit the fees for services such as maintenance and laundry that critics say are helping drive up healthcare costs.

“If these (dollars) are necessary, then prove it to us,” state Rep. Curt VanderWall, R-Ludington, said of the hospitals. “Open your books and let us see.”

The fees have been a mainstay for health systems for years but grown more controversial as hospital chains have bought outpatient services such as labs and doctor offices and added the charges to those visits as well.

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Bridge Michigan sent inquiries to 10 of Michigan’s largest healthcare systems and three rural hospitals. Bridge asked each how much they collected last year in facility fees and what they funded.

Several health systems responded with examples of overhead costs that facility fees help cover: cybersecurity, electronic medical records and emergency staff who work around-the-clock.

No hospital system would discuss dollar amounts.

“We’re going to pass on the opportunity …,” wrote a spokesperson for Detroit-based Henry Ford Health.

Grand Blanc-based McLaren Health Care concurred, adding “we will not be providing a comment.”

The Detroit Medical Center didn’t acknowledge the requests at all — sent by email, voicemail and text, after initially asking the questions be sent by email.

VanderWall has introduced a bill that would ban hospitals from collecting fees for routine care delivered in hospital-owned outpatient sites, for certain outpatient services delivered in a hospital and for telemedicine appointments.

“If these (dollars) are necessary, then prove it to us,” state Rep. Curt VanderWall said of hospitals’ stance. (Courtesy photo)

Hospitals would still be able to collect some of the fees when traditional care is delivered in a hospital. A lack of information, he said, hinders lawmakers’ ability to understand the scope of the issue both for patients and for hospitals, he said.

Opening hospital budgets to public scrutiny may be uncomfortable, but transparency is the only way to protect the demands on hospitals against patient needs, he said.

“Everything we’re going to do is going to be uncomfortable for all of us. But we have to make changes in healthcare and be willing to work to get to what is right,” he told Bridge.

Just a single rural hospital contacted by Bridge — Scheurer Health — in Michigan’s Thumb would discuss how much it receives in facility fees.

It expects about $125,000 this year that will stretch its $125 million budget, according to CEO Ross Ramsey. The money it collects in fees helps pay for things that aren’t always in use, but must always be available — such as a “telestroke robot” that helps an off-site specialist connect with a team treating a stroke patient and equipment to communicate with those who don’t speak English.

Facility fees are crucial to their very survival, in the face of inadequate reimbursements and uncertainty in upcoming Medicaid cuts, according to the Michigan Health & Hospital Association.

But neither the hospital association nor the state tracks how much its industry collects in facility fees.

There are some clues, though, that facility fees are a powerful driver of health care costs.

The Congressional Budget Office has estimated that addressing facility fees in Medicare benefits — in just one part of Medicare, Part B — could save the nation $157 billion over 10 years.

Here are the responses from the ten largest Michigan-based health care systems.

Bronson Healthcare Group — A spokesperson said a number was not possible because “facility fees are not recorded as a separate revenue line item.”

“Facility fees are a long-standing part of hospital-based billing,” she wrote. Like other hospital systems that responded to requests for this story, Bronson uses facility fees in its overall operating budget, rather than earmarking them for a specific purpose.

She provided two webpages where patients can find out more: How to Pay Your Bill and What is provider-based billing?

“In addition to using the online cost estimator, which is specific to a patient’s health insurance, patients may contact Bronson directly for a personalized cost estimate that also takes into account their insurance, location of care and expected services,” the spokesperson wrote.

Corewell Health — The state’s largest health system also would not disclose the amount of facility fees it collects at outpatient clinics, but a spokesperson said, by email, that fees “support the costs associated with operating these clinics, including maintaining hospital-level quality and safety standards, specialized equipment and technology, care coordination services and other resources necessary to deliver patient care.”

The spokesman noted that costs for care vary by insurance provider, so “we encourage patients to contact their health insurance provider with questions about their specific coverage and out-of-pocket costs.”

Detroit Medical Center — After a local spokesperson initially instructed Bridge to send questions about facility fees by email, the for-profit hospital alliance did not acknowledge the email or multiple follow-up emails, texts and phone calls.

Texas-based Tenet Health, which owns DMC, also did not return messages.

Henry Ford Health — Amid a $2.2 billion expansion, the Detroit-based hospital declined to discuss dollar amounts it collects in facility fees, directing questions to the Michigan Health & Hospital Association.

A spokesperson provided this link to explain facility fees, but added “we’re going to pass on the opportunity to contribute any further information.”

McLaren Health Care — A spokesperson had this response: “Thank you … we will not be providing a comment.”

MyMichigan Health — “We will pass on this interview opportunity. Thank you for reaching out,” wrote a spokesperson.

Munson Healthcare – A spokesperson did not disclose dollar figures, but released a statement.

A sign from McLaren. — McLaren and other Michigan hospital systems declined to say how much in facility fees they collect each year. “We will not be providing a comment,” a spokesperson said by email. (Robin Erb/Bridge Michigan)

Hospital facility fees, which are posted transparently on our website, pay for things like nurses, social workers, maintenance of buildings and high-tech equipment, all of which are critical for providing care in our communities,” the spokesperson wrote.

Munson reports its prices on a “publicly accessible price transparency and shoppable services resource available on our website.”

Trinity Health — The Livonia-based system, which operates 10 Michigan hospitals, including a new Brighton hospital that opened earlier this year, “won’t be providing any further comment,” a spokesman wrote.

University of Michigan Health System and U-M Health-Sparrow — The system would not discuss dollar figures, but it responded with several details, noting that insurance reimbursements don’t always cover the full cost of care.

“Facility fees are a longstanding component of hospital outpatient reimbursement nationwide,” a spokesperson wrote by email.

They support a “broad range of people, services, technology and infrastructure required to provide care beyond the physician’s professional services,” she wrote.

Among those costs are “nurses, technicians and other clinical staff; laboratory and diagnostic services; patient safety and quality programs; care coordination; security; information technology and clinical data systems; equipment and facilities; and other resources needed to operate a hospital and care for patients.”

“In other words,” she continued, “an outpatient hospital visit involves substantially more than the physician’s time with a patient.”

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