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Telemedicine was supposed to reduce costs. Here's why that's not always the case

SCOTT SIMON, HOST:

Telemedicine, consulting a doctor remotely on a phone or computer, is not new, but it has certainly grown since the pandemic. Proponents hoped it would reduce costs. After all, patients can see a doctor without stepping into a clinic. A new report from Kaiser Health News finds that doesn't necessarily mean patients won't be charged for using a health care facility. And after years of patient complaints, some state governments are taking a notice. Markian Hawryluk reported the story, joins us now from Denver. Markian, thanks so much for being with us.

MARKIAN HAWRYLUK: Thanks for having me, Scott.

SIMON: What is a facility fee when it comes to telehealth anyway?

HAWRYLUK: Well, Scott, you know, facility fees are fees that a hospital charges when you use their facilities. Some describe it as a walking-through-the-door charge. And it's meant to help them pay for their overhead costs - for staffing, equipment, computers, all the stuff they need to run their hospital or an outpatient clinic. And these can run anywhere from, you know, $50 to hundreds or even more than a thousand dollars.

I recently spoke to Brittany Tesso. She's a mother of two. And in 2021, she needed to schedule a speech therapy evaluation for her 3-year-old son, Roman, and was referred to Children's Hospital of Colorado. She ended up receiving a bill of nearly $700 from the doctors, the clinicians doing the evaluation. But then, she got another bill for $800 from the hospital. She was confused about why she was getting a second bill. The whole evaluation happened over Zoom. So why the extra charge?

SIMON: What did the hospital say when she contacted them?

HAWRYLUK: Tesso called the hospital because she thought this was - had to be a mistake. And when she got someone on the line, they told her...

BRITTANY TESSO: No, you paid the doctor's bill, but this is our facility fee. I got confused 'cause I was like, well, I didn't come to your facility. We had a Zoom call, a telehealth appointment. And she was like, yes, but the doctors and the specialists still have to use the hospital. It's - you know, it's kind of one of those situations where it's like, well, I'm sorry, but this is what we charge.

SIMON: And what did the hospital say was the reason for the fee?

HAWRYLUK: Well, hospitals say they have to charge these facility fees to cover their costs. And Children's Hospital of Colorado, for example, they don't employ their own physicians. They're staffed with doctors from the University of Colorado Medical School. So those doctors charge for their services, and that payment goes to the medical school. So if the hospital doesn't charge a facility fee, they don't get paid at all for that visit.

But it's also a problem when patients go to visit hospital outpatient clinics. They get charged a physician's fee by the doctor and then a facility fee by the hospital. And when a hospital buys an independent physician practice, all of a sudden, patients who have gone to that clinic for years get charged an extra facility fee, sometimes more than doubling their costs overnight.

SIMON: I gather some states have obviously noted this and are starting to question these fees.

HAWRYLUK: Yeah, absolutely. And I can start here where I am in Colorado. Lawmakers here have proposed a bill that would limit some of the facility fees hospitals can charge for primary care, for preventive services, or for telehealth. And it isn't just Colorado. Seven other states have already passed legislation or are considering limits on facility fees. And you can bet most other states are watching how those efforts will pan out. There is a federal bill to address this as well, but it hasn't gotten much traction so far.

SIMON: How do hospitals and other medical facilities respond to this?

HAWRYLUK: Yeah, hospitals say that, you know, if they can't charge these facility fees, they're going to have to close these outpatient clinics. And, you know, they say they acquire physician practices because those physicians are having trouble staying in business, and they need the hospital to bail them out. And, you know, that's debatable. Hospitals also buy physician practices in part because it becomes another front door into their system, and they can then refer those patients to the hospital for surgeries and inpatient care, for lab tests or imaging. And as consumer groups like the Colorado Consumer Health Initiative point out, hospitals are making billions in profits, even the nonprofit hospitals. UC Health, which is the biggest hospital system in Colorado, pulled in more than $2.6 billion in net income over the past five years.

SIMON: Markian, where does all this leave patients?

HAWRYLUK: Yeah, patients are watching to see what will happen with the Colorado bill. Does it get passed? And will the governor sign it if it does? But in the meantime, patients can ask before their appointments whether a facility fee will be charged and how much it will be. They could also look for an independent physician practice that isn't affiliated with the hospital system and therefore doesn't charge a facility fee.

In markets like Denver, that can be hard to find because most of those independent-affiliated practices have now been purchased by or affiliated with hospital systems. When Brittany Tesso's son, for example, got referred to Children's Hospital for a gastroenterology appointment, she asked what the facility fee would be, having already gone through this once before. They quoted her a fee of $994 on top of what the doctor would charge. So she decided to take her son to an independent physician instead, and she only had to pay a $50 co-pay.

SIMON: Markian Hawryluk is Colorado correspondent for Kaiser Health News. Thanks so much for being with us.

HAWRYLUK: Thanks for having me. Transcript provided by NPR, Copyright NPR.

Scott Simon is one of America's most admired writers and broadcasters. He is the host of Weekend Edition Saturday and is one of the hosts of NPR's morning news podcast Up First. He has reported from all fifty states, five continents, and ten wars, from El Salvador to Sarajevo to Afghanistan and Iraq. His books have chronicled character and characters, in war and peace, sports and art, tragedy and comedy.