BETHLEHEM, Pa. — Merrie Margeret Smith thought she knew what her doctor’s visit would cost.
For years, the Lehigh Valley Health Network patient paid a $40 copay to see her rheumatologist — standard under her insurance. But after a recent appointment, the total came to $228.90.
“I’ve been going to LVHN for more than 30 years. My rheumatologist saved my life,” said Smith, who has lupus and sees multiple specialists. “But now I’m being charged extra just because of the building she’s in.”
The difference came down to a facility fee — an additional charge that hospitals can add when care is provided at a location designated as a hospital-based outpatient department.
These fees are separate from what the doctor charges and cover the use of hospital staff, equipment, and infrastructure. They’re permitted under federal Centers for Medicare and Medicaid Services (CMS) guidelines.
“Provider-based billing is the national model of practice for integrated health care delivery systems,” said LVHN spokesperson Jamie Stoker. “Patients receiving care at provider-based Lehigh Valley Hospital facilities are receiving the highest-quality care, as these locations meet the most stringent Pennsylvania Department of Health and Joint Commission Accreditation standards.”
While facility-based billing is common at large health systems — including both LVHN and St. Luke’s — many patients don’t realize they’ll be charged extra for care in these settings. That confusion is at the heart of Smith’s frustration.
“I asked if this would happen again, and they told me yes — every time I go to a hospital-based facility, I’ll be billed that extra amount,” she said.
Smith said she was never notified that the office where she sees her rheumatologist had been reclassified. LVHN has not responded to multiple requests for comment about when the designation took effect or whether patients were informed.
Smith’s husband, who sees a specialist in the same building, canceled his own appointment after learning he’d be charged a facility fee as well.
“He’s not going now, more out of principle than anything,” she said. “But what about the people who can’t afford to just go somewhere else?”
Background of the billing model
Facility-based billing is not new — but for many patients, the impact is. Smith said that after sharing her experience online, she began hearing from other LVHN patients with similar stories.
“One woman said she was billed $900 for a mammogram,” she said. “Others told me they had charges over $1,300 and had no idea it was coming.”
One patient told her she asked in advance whether her procedure would be fully covered. She said staff told her yes — but she was later billed a separate facility fee.
LVHN merged with Philadelphia-based Jefferson Health in Aug. 2024, prompting administrative changes across the system. The network did not clarify whether the merger resulted in facility reclassifications.
In Pennsylvania, facility fees are legal and there’s no statewide requirement that hospitals notify patients in advance.
State Sen. Katie Muth, D-Chester, and Rep. Dan Williams, D-Chester, proposed legislation in 2022 to require hospitals to clearly inform patients when they’ll be charged facility fees and whether their doctor’s office is classified as a hospital-based site. The bill has not advanced.
“Our legislature needs to do better to protect our residents and front-line workers from loss of care or employment due to corporate greed,” Muth said.
At the federal level, bipartisan support is growing for site-neutral payment reforms — which would limit hospitals’ ability to charge more for services based solely on location.
‘People need to know’
For patients like Smith, the issue isn’t just the billing model — it’s the lack of clarity.
“If I have to go more regularly, and each time I’m billed an extra $200? That’s going to be a huge financial burden just to stay healthy,” she said. “Even with good insurance, I don’t think I should be paying this.”
Living with lupus, Smith can’t always predict when a flare will strike. She said access to care shouldn’t depend on whether a doctor practices in a hospital-owned building.
“People need to know this is happening,” she said. “Because if they don’t ask the right questions ahead of time, they’re going to get blindsided. Just like I did.”
