Released: November 16, 2006

‘Hospital-based’ clinics can charge more

Source: Julie Appleby, USA Today

Concerned about a possible toenail infection, Lori Mill went to her doctor’s office in an outpatient clinic owned by the Virginia Mason Medical Center in downtown Seattle. Her doctor clipped off a piece of nail and sent it to the lab. Total tab: $1,133. Mill found out later that she could have paid hundreds less for the same thing had she gone to one of Virginia Mason’s seven other, more suburban, outpatient clinics, where her doctor also practices.

Her situation illustrates a practice that is legal and common, but little known to patients: Some medical clinics are considered “hospital-based” and charge additional fees for the same services, even if they aren’t inside an actual hospital.

With high-deductible insurance and 20% co-payments becoming increasingly common, more consumers such as Mill are noticing such “facility fees,” and the hospital industry’s legal advisers say the charges may become the next court battleground.

From nail clipping to lawsuit

Mill’s toenail clipping in 2004 led to a class-action lawsuit. The lawsuit argued that, under state consumer protection laws, patients should have been told in advance about additional fees.

Earlier this month, Virginia Mason settled, agreeing to refund money to thousands of patients, to tell patients that it charges more at some clinics in its system than others and to find ways to help patients estimate upfront their costs for some outpatient procedures.

“When consumers are making decisions about where to go for health care, the court in this case is saying they have a right to know about these price differences,” says attorney Matt Geyman of the Phillips Law Group in Seattle, which represented Mill and another patient, DeLois Gibson.

That settlement — along with a similar agreement reached in September with Seattle’s University of Washington Medical Center — may further efforts to make medical price and quality data more available.

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