After social media frenzy, Meadville Medical Center officials explain need for facilities fees [The Meadville Tribune, Pa.]

Feb. 9—Lorna Parker of Saegertown and her daughter-in-law Ashley Parker didn't expect to be billed hundreds in facilities fees after separate visits to Meadville OB/GYN Associates last September.

They both were shocked and angered at the same time upon receiving the fees.

Lorna Parker had her annual exam, and later was hit with a $391 clinic charge, of which $338.93 wasn't covered by her insurance.

"There was a sign in the office that there could be an additional charge, but no chart, no range of what it could be," she said. "It was a $391 clinic charge that wasn't (fully) covered."

It prompted her to call both Meadville OB/GYN Associates and Meadville Medical Center (MMC) for an explanation about the two charges she was told it was because the visit had evolved from strictly an annual exam. Parker had discussed with the physician that she was suffering from hot flashes and obtained a prescription during the same appointment.

"To me, it's insane how they can justify it," Parker said of the fee. "They said, 'This will go toward your deductible,' but you still have to pay it. Maybe twice in 20 to 30 years we've gotten close to our deductible."

Parker said she's used to paying a copay on the insurance plan she has with her husband, but still can't fathom the facilities fee.

"You think I'd be mad if it was just $20 more one year to the next? The facility fee is different," she said.

Daughter-in-law Ashley, who went for other services during her visit, was billed $62 medically by Meadville OB/GYN, but then a $284 facilities fee from MMC.

"It was for lab results," the younger Parker said of the $284 facilities fee. "It could have been done over the phone, but they wanted me to come in. It irks me that I was in there five minutes and it still cost that much."

MMC officials have been hoping to clarify billing and fees like the one the Parkers received in the wake of a backlash on social media the past several months.

They say the financial impact on patients comes down to health care billing rules and an individual's insurance coverage.

Split billing

Fallout hit a fever pitch in early November, according to hospital officials, after Meadville OB/GYN patients complained on social media about being billed both a physician's service and a facility fee.

Hospital officials explained to The Meadville Tribune that split billing began at Meadville OB/GYN Associates after that operation came under the MMC umbrella about a year ago.

Meadville OB/GYN became part of MMC in February 2023 as a hospital outpatient, or provider-based, clinic, to keep obstetrics available locally. It now is one of 10 specialty outpatient clinics run by the med center.

"Some of (those specialty outpatient clinics) have been part of the hospital for a long time," said Don Rhoten, MMC's vice president for community engagement.

Officials said the separate bills, while new for OB/GYN patients, are part of the standard billing process for specialty clinics.

The hospital outpatient departments have to meet federal accreditation standards for hospitals, which are higher than those of physician-based clinics, according to MMC officials. The higher federal standards mean higher associated costs than a private physician office.

Under health care billing rules, seeing a doctor in an outpatient, or provider-based, clinic that's owned by the hospital means separate physician and facilities charges. Even though the clinic may be away from the main hospital, it still is considered part of the hospital.

However, MMC's primary care doctor sites — where people get the majority of primary health care — are not provider-based locations.

"So you can go to go for annual wellness check-up and there's no technical (or facilities) fee. That's intentional," said Gabrielle Pierce, MMC's vice president of physician services and associate legal counsel. "We want people to go to primary care and seek treatment when they need to."

Billing backlash

The backlash against MMC built up over bills related to OB/GYN and what patients thought was part of preventive care.

Insurance companies often cover routine preventive care — resulting no or only a small copay insurance fee for the patient.

However, often a patient's visit — especially a visit to a specialty service outpatient clinic — may evolve from a preventive checkup into something more than what was originally scheduled.

"If during that checkup, the patient says, 'As long as we're here I've been noticing this....,' and the doctor orders additional workups, then that is no longer a preventative checkup," Rhoten said. "And that would become — potentially and depending on every insurance that is different — a billable visit to that patient."

"Even if they did originally schedule a preventative checkup, it can easily become more than that," Rhoten said. "It can evolve into that."

Individual fallout

With fees potentially adding up depending on what is asked and ordered at a checkup has critics of the fees wondering if people will avoid future exams.

Parker, for one, said the facilities fee charge has made her apprehensive to get a mammogram and rethink her health care options.

Evan Andrae of Meadville, a patient of the Mind Body Wellness Center for years, said he started getting facilities fees last year related to appointments at that clinic.

"For years I was paying $50 (a visit) which I understood to be a facilities fee," he said. "It made sense to me. It would be several hundred dollars a year, but it would be manageable."

Last spring, Andrae received a facilities fee bill for $360 following a visit.

"There was not even a letter that the next time you visit there'll be a fee," Andrae said. "We're all used to (price) increases, but when it's six or seven times more than what you're expecting, it hurts."

Andrae said he's concerned others could make health decisions such as stop taking medications or seeing a doctor due to the facilities fees.

"I don't know anybody who can handle an extra $300 right now," he said.

Carolyn Hall, an insurance agent and owner of T&T Coverage Connection in Meadville, shares Andrae's concern.

"It depends on what type of insurance whether the patient feels those costs," Hall said. "People on Medicare and Medicaid might not feel it. But those who have policies through their employer or privately buy insurance are."

While the facilities fee would apply toward the person's insurance deductible, "That's not the point," Hall said. "The point is you have to pay that deductible and you might otherwise not feel that deductible.

"It's so, so important that our community has a hospital and I feel it's important the community has an independent hospital," she said. "However, the challenge for the hospital is to provide to the community at an affordable rate. The problem is their facilities fees aren't affordable to most."

Dealing with complexities

Rhoten and Philip Pandolph, Meadville Medical Center's president and chief executive officer, say it's a complicated issue.

"It really is unique to the individual — what potentially their charge or outcome can be and that's what's so difficult to articulate in a way people understand," Pandolph said.

He points out that those who are paying for insurance coverage — either through an employer or purchasing on their own — are in high-deductible insurance plans compared to 10 to 20 years ago

"These things happened in the past, but you didn't notice because insurance was covering the majority the cost which was provided by your employer," Pandolph said of fees. "High-deductible plans are being chosen because they seem more affordable. The monthly payment is lower, but then you go access health care and you have a significant out of pocket (expense). Lots of people get frustrated."

Keeping OB/GYN care, especially obstetrics, available locally was a conscious decision by the hospital as it was a private practice looking for a partner to remain financially viable.

"We chose to be that partner to preserve obstetrics and gynecology in the community," Rhoten said. "It was to make sure you didn't have 70 miles between Erie and 50 miles to the south to give birth. We've estimated we've saved 50 lives between moms and babies" in 2023.

"When we converted it to a department of the hospital, should we have put out an announcement to the patients? Probably," he added.

"We feel it's really important to preserve access to obstetric care in our community," Pandolph said. "In community hospital settings like ours, they're expensive to run and high risk — and they provide a really important service."

Maintaining independence

Both Pandolph and Rhoten said the hospital has to look at the broader picture to maintain its independence.

"In the last 14 years the hospital has lost money six of those years," Rhoten said. "It's a challenging balance to weigh how you maintain services, work best to maintain the health of our community and maintain the financial viability, not only for those services but the entire system at large."

A Tribune review of Meadville Medical Center's federal tax returns filed with the Internal Revenue Service for tax years 2008 through 2021 show the hospital itself made money 12 of those 14 years.

In the 2008 through 2021 period, IRS records show MMC itself had a total profit of $49.77 million with $77.78 million in combined profits and $28.01 million in combined losses. IRS-qualified tax-exempt organizations are required to file a Form 990 tax return, which is open to public inspection. The 2021 tax year is the latest available from the IRS for the hospital.

When asked to clarify the discrepancy, hospital officials explained that the entire Meadville Medical Center Health System — Meadville Medical Center and Titusville Area Hospital, all subsidiaries, specialty practices and clinics like cardiology, pulmonology and urology, among others — actually had lost money in 10 of the last 14 calendar years (covering 2010 through 2023 inclusive).

In documents provided to the Tribune, the entire Meadville Medical Center Hospital System had an average net loss of $2.8 million per year and a total net loss of $39.22 million for that 14-year period.

"In the long run, while in isolation, people may be able to get a service less expensively in an office somewhere outside the community, but when they look at their broader scope of health care needs we're a low-cost provider," Pandolph said.

MMC is one of the only providers in many services that takes Medicaid, Pandolph said. Medicaid is a state medical care plan funded by the federal government that pays for public assistance recipients.

"We take Medicaid in almost everything we do and take pride in serving those that are dependent on Medicaid for their insurance," Pandolph said. "We pride ourselves in serving those most vulnerable. We've done it for decades and we'll continue to do it and we'll continue to find a way to do it."

Keith Gushard can be reached at (814) 724-6370 or by email at [email protected].

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