Medicine upside down: When hospital rates are charged at the doctor’s office

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One of the chief arguments for making health insurance, and therefore health care, accessible to more Americans is so that routine treatment can be obtained in the doctor’s office rather than in the more specialized, more costly emergency room.

It’s good for the patient, good for the insurer and good for a society that desperately needs to reduce health care costs.

But hospitals have turned that notion on its head by seeking hospital-size reimbursements for care delivered in doctor’s offices. How can that be?

The case of an O’Hara man, as reported Sunday by the Post-Gazette’s Steve Twedt, showed that although the patient had a routine, 20-minute exam in his dermatologist’s office in Harmar, he later received two bills — one from the doctor and one from UPMC St. Margaret Hospital, five miles away.

It turns out that, under Medicare rules, certain freestanding clinics can be considered hospital-based facilities, letting clinics charge inpatient-type fees for outpatient-type care. Because the billing practice is permitted by the Centers for Medicare & Medicaid Services, UPMC is not the only health care provider taking advantage. The news story reported that many other hospitals, including Highmark’s Allegheny Health Network, do the same.

This is unconscionable and should be material for a congressional investigation. What other gaping loopholes in federal regulations must be closed?

A UPMC spokeswoman said that under the CMS guidelines and insurer contracts, “facility fees may be charged in hospital-based clinics to reflect the cost of services and meeting certain regulatory standards regarding patient safety and quality.” It’s hard to conceive of what hospital-grade enhancements are being provided in a second-floor dermatologist’s office above a gym that would merit a separate hospital invoice.

It’s the kind of billing practice that breeds consumer cynicism about health care providers and the kind of lax oversight by government that shows no one is minding the store.

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