Jordan Ellis
Hospital facility fees are becoming more common as hospitals acquire more doctor practices, walk-in clinics, and other healthcare providers. These fees are often unexpected and can add anywhere from $15 to thousands of dollars to a medical bill. While facility fees are legal in most states, there is growing concern about their impact on patients, insurers, and employers. This has led to some states passing laws restricting or banning facility fees, and insurers negotiating to prohibit these fees. However, it is still unclear whether these efforts will significantly reduce costs for consumers. As a result, patients are advised to be proactive in understanding their potential financial obligations and negotiating fees when possible.
| Characteristics | Values |
|---|---|
| What are facility fees? | The portion of a health care treatment bill that covers all the costs of delivering patient care, except for those billed by physicians and other professionals. |
| Why are they charged? | Hospitals argue that the fees help them provide critical services to everyone, regardless of their ability to pay. |
| How much do they cost? | Facility fees can range from $4 to $1000. |
| Are they covered by insurance? | Many insurers don't cover facility fees or cover only a portion. |
| What can patients do? | Patients can try disputing the fee with their insurer, or the hospital or provider. |
| What are lawmakers doing? | State lawmakers are looking to change the situation. Connecticut, Colorado, Maryland, New York, Ohio, Texas and Washington state have passed laws restricting or banning facility fees. |
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What You'll Learn
Insurers may cover facility fees, but only partially
Steep hospital facility fees are becoming widespread as hospitals buy up doctor practices, walk-in clinics, and other healthcare providers. Facility fees are the portion of a healthcare treatment bill that covers all the costs of delivering patient care, except for those billed by physicians and other professionals. These fees are often high relative to the cost of the service provided. For instance, a patient was charged $1100 for a 30-second procedure to determine whether she had fungus under her toenail, with the facility fee portion amounting to $418, almost 40% of the total bill.
Facility fees are used to cover the true cost of providing physician services, which hospitals do by subsidizing physicians' pay above the underpayment that they are reimbursed from both public and private payers. Hospitals argue that the fees help them provide critical services to everyone, regardless of their ability to pay. However, patients aren't the only ones upset by these fees. Employers, shocked at the soaring costs of their employees' health insurance, have banded together in states like Indiana and Texas to push lawmakers to take action.
While facility fees vary widely by hospital and service provided, they can add hundreds or even thousands of dollars to a medical bill. For instance, patients have reported being charged out-of-hospital facility fees of $503 for a pediatric visit, $488 for an appointment to get ADHD medication, and $355 for steroid injections for arthritis. These fees are often unexpected, as it is not always obvious to a patient that a doctor is employed by a hospital or that a facility is owned by a hospital.
It is important to check with your insurer to find out their policy on facility fees. While facility fees are legal in most states, consumers can take proactive steps to find out whether they will incur one and negotiate with their healthcare provider or insurer to cover more of the cost.
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Some states have banned facility fees
Steep hospital facility fees are becoming widespread as hospitals buy up doctor practices, walk-in clinics, and other healthcare providers. Facility fees are the portion of a health care treatment bill that covers all the costs of delivering patient care, except for those billed by physicians and other professionals. They are separate from the professional fees charged for medical services delivered by healthcare providers. These fees are often high relative to the cost of the service provided. For example, a patient was charged $1,100 for a 30-second procedure to determine whether she had fungus under her toenail. The facility-fee portion of the bill turned out to be $418, almost 40% of the bill.
Facility fees are increasingly used to cover the true cost of providing physician services, which hospitals do by subsidizing physicians' pay above the underpayment that they are reimbursed from both public and private payers. Hospitals argue that these fees are necessary to cover costs, especially as they provide 24/7 access to care for anyone who comes through their doors, regardless of their ability to pay. However, patients are often surprised by these fees, which can significantly inflate their medical bills.
In response to rising facility fees and consumer complaints, some states have taken legislative action to ban or regulate these fees. For instance, Colorado, Connecticut, and New York have banned facility fees for certain outpatient services at non-hospital locations or for telehealth visits. Connecticut also bans facility fees on certain outpatient services and limits what uninsured patients can be charged. It prohibits doctors from charging a facility fee for new patient visits. Maine, Maryland, and Connecticut have also passed legislation requiring hospitals and healthcare facilities to inform patients about facility fees. Indiana's 2023 package of healthcare bills increased reporting requirements for hospitals charging facility fees.
While these efforts have seen bipartisan support, some are skeptical that banning facility fees will meaningfully reduce costs for consumers or insurance companies. Providers might simply find other ways to incorporate these fees into their bills. Instead, there should be discussions about what are appropriate rates, how providers can be more efficient, and how administrative costs can be reduced.
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Facility fees can be charged for services provided outside the hospital
Facility fees are the portion of a healthcare treatment bill that covers the costs of delivering patient care, excluding fees billed by physicians and other professionals. Hospitals charge facility fees to cover the costs of operating a full-service, 24/7 hospital, including equipment, support staff, utilities, maintenance, and security. These fees are often charged at hospital-owned clinics and outpatient centres, even when they are not located near the hospital campus.
While facility fees are common, they are not always covered by insurance. Many insurers do not cover facility fees or only cover a portion of them. As a result, patients may receive unexpected bills for facility fees weeks after receiving treatment. This has led to increasing criticism from patient advocates and employers concerned about the soaring costs of employee health insurance.
To address this issue, some states, such as Connecticut, have banned facility fees for certain outpatient services and limited the fees that can be charged to uninsured patients. Additionally, Congress has introduced legislation to limit hospitals' ability to charge facility fees in the context of Medicare hospital outpatient payments. However, hospitals argue that facility fees are necessary to cover the high costs of providing 24/7 care and that restricting these fees could result in the loss of access to essential healthcare services.
It is important for patients to be proactive in understanding whether they will incur facility fees and to communicate with their insurer and healthcare provider about these charges. While it may be challenging to fight facility fees, patients can negotiate with their healthcare provider to waive or lower the fee or appeal to their insurer to cover more of the cost.
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Facility fees are charged to cover the costs of operating a hospital
Facility fees are charged by hospitals to cover the costs of operating a hospital and providing patient care. These fees are added on top of the physician's fees and can range from a few dollars to thousands of dollars. While facility fees are meant to cover the overhead charges of operating a hospital, they are often not directly related to the specific service or setting of the patient being charged.
Facility fees are becoming more common as hospitals acquire more physician practices, walk-in clinics, and other healthcare providers. This allows hospitals to charge higher prices for care provided in these locations compared to independent provider offices. The fees can be especially surprising for patients when they are billed for a hospital facility fee after receiving care at a smaller clinic or outpatient center that is owned by a hospital but located away from the hospital campus.
The fees are often high relative to the cost of the service provided and can add hundreds or even thousands of dollars to a medical bill. For example, a patient was charged $1100 for a 30-second procedure to check for fungus under her toe, with the facility fee portion of the bill being $418, almost 40% of the total bill. In another case, a patient was charged a facility fee of $503 for a pediatric visit.
Facility fees are not always covered by insurance, and patients may be responsible for paying these fees out of pocket. Some insurers may refuse to cover facility fees, especially for out-of-network physicians or outpatient services. Patients can check with their insurer to find out their policy on facility fees and whether they will be covered.
While facility fees can be a surprise for patients, hospitals argue that they need to impose these fees to offset the cost of providing 24/7 access to care for anyone who comes through their doors, regardless of their ability to pay. However, policymakers and lawmakers are increasingly looking at ways to limit or restrict facility fees to protect consumers from unexpected medical bills.
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Facility fees can be disputed
Facility fees are the portion of a healthcare treatment bill that covers all the costs of delivering patient care, except for those billed by physicians and other professionals. Hospitals impose these fees to cover the costs of operating a full-service, 24/7 hospital, including equipment, support staff, utilities, maintenance, and security. These fees can be extremely high, ranging from as little as $15 to thousands of dollars, and are often unexpected by the patient.
While facility fees are legal in most states, they can be disputed. Here are some steps you can take to dispute a facility fee:
- Check with your insurer: Many insurers don't cover facility fees or only cover a portion of them. Talk to your insurer to understand their policy on facility fees and whether they can cover any part of the fee.
- Negotiate with the healthcare provider: Although it may be challenging to fight a facility fee, you can always discuss the possibility of waiving or reducing the fee with your healthcare provider.
- Dispute the bill: If you received treatment on or after January 1, 2022, and the billed amount is $400 or more above the estimate provided, you may be able to dispute the charges. You can reach out to the Consumer Financial Protection Bureau online or by calling their helpline. There is a $25 non-refundable administrative fee to file a dispute, which will be deducted from the amount you owe if the dispute is resolved in your favor.
- Know your rights: Understand your rights and protections under the No Surprises Act. For example, you should not receive unexpected bills for emergency services from an out-of-network provider. Nonprofit hospitals are required by law to offer financial assistance programs, and you can also work out payment arrangements with other providers.
- Review your bill closely: Ensure that the items on your bill are accurate and that you received the treatments listed. Verify that the bill has your correct name, insurance information, and billing address. If there are any discrepancies or unclear charges, ask your provider for a plain-language explanation.
It is important to note that disputing a bill can be a complex process, and there is no guarantee that the dispute will be resolved in your favor. However, by understanding your rights, proactively communicating with your insurer and healthcare provider, and carefully reviewing your bill, you can take steps to protect yourself from unexpected and excessive facility fees.
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Frequently asked questions
Hospital facility fees are the portion of a health care treatment bill that covers all the costs of delivering patient care, except for those billed by physicians and other professionals. These fees are often added to help cover the higher costs of operating a full-service, 24/7 hospital, including equipment, support staff, utilities, maintenance, and security.
It depends on your insurance provider and the specific plan. Some insurers cover facility fees, while others only cover a portion or refuse to cover them in certain circumstances, such as for care provided by an out-of-network physician. It is important to check with your insurer to understand their policy on facility fees.
Hospital facility fees can range from a few dollars to thousands of dollars, with some patients reporting fees of over $400 for a single appointment. These fees are often high relative to the cost of the service provided and can add a significant amount to a medical bill.
