Medical Facilities Far From Hospitals Are Charging Hospital Rates As ‘Satellites.’ What Gives?

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No one likes to go to the doctor and get an unexpected surprise when the bill comes.

Yet it seems like that’s become a common recurrence for some people.

The latest trend is that hospitals, typically understood as contained within a specific cluster of buildings, are buying “satellite” facilities and then charging hospital rates on sometimes unsuspecting patients.

Is this legal? That’s what a listener of the Clark Howard Podcast recently asked.

Why Your Local Doctor’s Office Could Be Part of the Hospital System

Can a medical office nowhere near a hospital charge me “hospital-based” service fees without warning me?

That’s what a listener asked Clark on the June 15 podcast episode.

Asked Ted in Rhode Island: “I was recently referred to a new medical specialist. I had my yearly checkup and was charged my $50 co-pay. A week later I received a bill for $379.81 from this physician for ‘hospital-based services.’

“Upon investigation, the new specialist’s office, not anywhere near the hospital, is designated as a ‘hospital-based location.’ They claim to be a satellite, affiliated with the local hospital, and can charge a facilities fee for checkup appointments.

“I was never advised of the fee. I’ve contacted Rhode Island’s Lifespan health system and was advised I have no recourse but to pay and any future checkups with this specialist will include this ‘hospital-based services’ fee.

“Is this essentially a new revenue stream for healthcare, and is there any additional action you would advise?”

Ted isn’t alone in facing this new reality. Hospitals in major metro areas have been conducting land grabs in recent years, as Clark explains.

“In markets all over the country, hospitals are bulking up and becoming hospital systems. They’re buying up primary care practices, specialist practices and the rest to act as feeders,” Clark says.

“They pay the doctors millions of dollars to sell their practices. So the doctors become employees. The hospital has paid all this money and has to pay the doctor a salary. And they turn around and bill you these junk fees.

“And it’s exactly as you said. They’re satellite facilities, a nondescript doctor’s building or medical building. But for medical insurance purposes, they’re all treated as if they’re in the building of the hospital itself.”

Hospital Systems Charging Junk Fees: What Should You Do?

Clark recently got a surprise about his medical bill. Rather than getting a shock when it was time to pay, his insurance company nudged him about a way he could’ve saved money.

“I got an email from my insurer just yesterday saying, ‘You know that test you just had, if you click here, we’ll show you how much money you would’ve saved if you had not had it at a hospital-affiliated facility,'” Clark says.

“And I would’ve saved $271 of it out of my own pocket if I had not had it at the hospital-based facility.”


Some financial decisions require you to be proactive. For example, when you hire a financial advisor, Clark says, you need to ask whether that person is a fee-only fiduciary. There’s a whole list of questions Clark wants you to ask when you hire a contractor. But many people trust doctors to have their best interests at heart.

It’s gotten to the point, however, where you’ve got to ask the doctor’s office a “gotcha” type question.

“The question you need to ask now is, is this doctor employed by a hospital system? Or are they an independent doctor?” Clark says. “Because otherwise you’re going to see all these fees a lot of times not covered by insurance.”

Final Thoughts

It’s a new era when it comes to doctor’s offices. If you’re going to a new facility, even if it’s far away from the actual hospital, you need to ask whether they’re affiliated with the hospital system.

Otherwise, you may be unaware that the hospital has bought out that medical practice. And that they’re going to bill you junk fees as if you’re being treated at the hospital itself.

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