Bill promotes transparency in health care billing process

YAKIMA, Wash. — A year and a half ago, patients at Yakima Valley Memorial Hospital's Cornerstone Medical Clinic were shocked and angry when they began receiving two bills for their doctor visits: one from the clinic and one from Memorial, which operates Cornerstone as a hospital outpatient facility.

Now, a proposal in the Legislature would require health care providers to clearly notify patients of similar "facility fees." So far, the measure has received bipartisan support and most affected providers agree it will be helpful for patients.

"It's a matter of transparency. People want to know, and they have a right to know, if they're being charged for the use of the facility," said Rep. Norm Johnson, R-Yakima, prime sponsor of House Bill 2582.

Johnson's bipartisan co-sponsors include the chairwoman of the House Health Care and Wellness committee, Rep. Eileen Cody, D-West Seattle.

In Yakima, Memorial officials said they implemented Cornerstone's facility fee because most of the clinic's patients are on Medicare, and Medicare's low rate of reimbursement meant Cornerstone was losing money. By the time the fee took effect in June 2010, hospital officials said Memorial was subsidizing costs at Cornerstone by $2.5 million to $2.8 million a year.

They estimated the fee would save around $1.5 million a year, and Memorial spokesman Leif Ergeson said it's surpassed that: The hospital's subsidized care costs for the clinic went down to about $400,000 in 2011.

Medicare reimburses patients for the facility fee, but not all private insurance companies do -- a big hurdle for some patients, as the fees can be hundreds of dollars for each visit.

Memorial now has a facility fee at its three hospital-based clinics: Occupational Medicine, Cornerstone and Northstar Lodge Cancer Care Center. The hospital's other 11 medical practices in the Yakima Valley are not considered hospital-based for billing purposes and therefore don't have the facility fee attached, Ergeson said.

Cornerstone is moving toward a Medicare-only clinic, but Ergeson said it's not fully there yet.

Memorial is supportive of Johnson's bill, though it already provides written explanation of its billing system to clinic patients.

"We are supportive of transparency for patients. That's our bottom line," Ergeson said.

Currently, Memorial gives all new patients a pamphlet explaining its billing structure, including the facility fee, and the same information is posted at clinic check-in stations and on the hospital's website. Every patient's paperwork also has a highlighted section telling them why they'll be receiving two bills for the service, Ergeson said.

Not all hospitals do that, Johnson said, so his bill would require health care facilities to notify patients of the facility fee and provide an estimate of what it would cost them.

Johnson said he is still working with the Washington State Hospital Association to resolve concerns about the proposal's reporting element. Originally, the measure required health care facilities to submit their facility fees to the state Department of Health, which would then issue a report.

"We have about a jillion things to report to a jillion different places, and that's really not exaggerating," said association spokesperson Cassie Sauer. "We really want it to be workable."

The association fully supports the bill's transparency measures, she said.

Yakima Regional Medical and Cardiac Center does not charge facility fees at any of its 13 clinics around the Valley, and hospital CEO Rich Robinson said there are no plans to add a fee at this time.

However, he wrote in an email, "As medical costs and reimbursement for health care services are constantly changing, facility fees can become necessary to continue providing services."

Johnson's bill will come to House floor debate soon, and he's optimistic about its passage.

* Molly Rosbach can be reached at 509-577-7628 or mrosbach@yakimaherald.com.