If you are poor, old or a veteran, the cost of treatment at Oregon Health Science University’s hospital and clinics is about to increase.

Starting Nov. 1, OHSU will begin charging a new “facilities fee” to patients on Medicare (which covers those older than 64), Medicaid (which covers the indigent) and TRICARE (for former military personnel).

The new fee for those three groups come as OHSU has had to institute layoffs and salary freezes in the past year to balance its books.

Although OHSU began notifying insurers and 18,000 federally insured patients of the proposed changes earlier this month, the mechanics of the fee remained a mystery to key players days before the change was due to begin.

“Our providers haven’t gotten a clear explanation of how it is going to work,” says Jeff Heatherington of the Coalition for a Healthy Oregon. The coalition represents nine insurers who serve Medicaid patients through the Oregon Health Plan.

Like anything to do with medical billing, the facilities fee is complicated. The new charges will allow the university to collect between $5 million and $10 million in additional reimbursement from the feds as well as an undetermined extra amount directly from patients through co-pays.

The benefit for OHSU—an independent public corporation that relies on the state for about 2.25 percent of its budget—is that it will get additional revenue without actually providing any additional or different service.

OHSU spokeswoman Lora Cuykendall says federal rules that the university had not previously taken advantage of let it charge more because its hospitals and clinics offer a higher standard of care than other facilities.

The new billing system means that when federally insured patients go to an OHSU clinic, instead of one bill they will now get two bills—one for professional services and one for “facilities.”

Medicaid and TRICARE patients will not pay any of the new charges out of pocket—although the new charge will fall on providers such as the nine members of Heatherington’s insurers coalition.

But Medicare patients who lack supplemental insurance will now face two co-pays rather than one.

Cuykendall says about 2,700 OHSU patients have Medicare coverage but no supplemental coverage. In a sample $218 bill OHSU produced for illustration purposes, the university would recoup an additional $58 from Medicare and the patient would face an additional $15 co-pay.

Cuykendall says one reason for the change is that OHSU and other providers are underpaid because Medicare reimbursements in Oregon historically have been significantly lower than average. Those Medicare reimbursements provide a baseline for all other government and private insurer reimbursements, and have been one of the many sticking points in the healthcare debate in Congress.

In 2004, the last year for which data is available, Kaiser Family Foundation figures show Oregon ranked about 41st in the nation for Medicare reimbursements—about 20 percent below the national average.

Cuykendall says that because OHSU serves patients with more complicated conditions than other institutions—both because it is a research hospital and a provider of last resort for the indigent—the university loses a lot of money serving federally insured patients. Last year, she says, the gap between OHSU’s costs and reimbursements from the federal programs was $70 million.

Overall, OHSU hospital made about $59 million last year in profits. But Cuykendall says those profits are necessary to offset the costs of educating doctors and nurses as well as doing research. Neither of those education and research functions is profitable.

Heatherington says while the new fee’s details remain murky, paying more for the same service is not a good deal either for patients of the Coalition for a Healthy Oregon or COHO’s insurers that link indigent patients to the Oregon Health Plan.

“When our members send a patient to OHSU,” Heatherington says. “they don’t intend to subsidize the med school or their research.”