Unpacking the Mystery of Surprise ‘Facility Fee’ Charges
Patients across the U.S. are increasingly encountering unexpected “facility fee” charges on medical bills—sometimes adding hundreds of dollars to routine visits. These fees, levied by hospitals and health systems for using their facilities, have surged in recent years, leaving many Americans frustrated and financially strained. Here’s why these fees exist, how they impact healthcare costs, and what patients can do to navigate them.
What Are Facility Fees—And Why Are They So Controversial?
Facility fees are separate charges tacked onto medical bills to cover overhead costs like equipment, staffing, and building maintenance. Originally intended for hospital-based clinics, they’ve expanded to outpatient offices owned by health systems. A 2023 American Hospital Association report revealed that 82% of hospitals now charge facility fees for outpatient services, up from 67% in 2018.
“These fees are essentially a hidden tax on patients,” says Dr. Linda Garcia, a healthcare economist at the Brookings Institution. “They’re billed on top of physician fees, often without clear disclosure, making it impossible for consumers to anticipate costs.”
For example, a routine echocardiogram might cost $300 at an independent clinic but balloon to $800 at a hospital-affiliated center due to facility fees. A 2022 JAMA Health Forum study found such fees inflated total healthcare spending by $12 billion annually.
The Financial Impact on Patients
Facility fees disproportionately affect those with high-deductible plans or limited insurance. Key findings:
- 72% of patients are unaware of facility fees until receiving a bill (KFF 2023 survey)
- Average facility fee for a 15-minute outpatient visit: $128 (Medicare Payment Advisory Commission)
- 45% of Americans with medical debt cited surprise fees as a contributor (Consumer Reports 2024)
Sarah Chen, a breast cancer survivor in Ohio, was stunned by a $650 facility fee after a post-surgery checkup. “I’d already met my deductible, but this fee wasn’t covered. No one mentioned it when I scheduled the appointment,” she says.
Why Are Hospitals Charging These Fees?
Hospitals argue that facility fees help offset the higher costs of providing care under their regulatory and infrastructure requirements. “Running a 24/7 emergency department or investing in advanced technology isn’t free,” explains Kevin McEwan, a spokesperson for the American Hospital Association. “These fees ensure we can maintain safety standards and access to care.”
However, critics counter that health systems exploit loopholes. By acquiring independent practices and reclassifying them as “hospital outpatient departments,” they qualify for higher Medicare reimbursements and impose facility fees—a practice the Medicare Payment Advisory Commission flagged in 2024 as “cost-driving and inequitable.”
How Patients Can Protect Themselves
Proactive steps to avoid sticker shock:
- Ask upfront: When scheduling, inquire whether the location is hospital-owned and if a facility fee applies.
- Compare costs: Use tools like Medicare’s Procedure Price Lookup or private insurers’ cost estimators.
- Negotiate or appeal: 60% of contested facility fees are reduced or waived (Patient Advocate Foundation data).
Policy Changes on the Horizon
Lawmakers are taking action. In 2024, the Biden administration proposed banning facility fees for telehealth and low-complexity visits. States like Connecticut and Colorado have passed laws requiring fee disclosures, while a bipartisan Senate bill aims to cap fees for outpatient services.
“Transparency alone isn’t enough,” argues Rep. Cathy McMorris Rodgers (R-WA), chair of the House Energy and Commerce Committee. “We need systemic reforms to align billing with actual costs.”
The Bottom Line for Healthcare Consumers
Facility fees are unlikely to disappear soon, but informed patients can mitigate their impact. Always review billing codes (e.g., POS 22 for outpatient hospital charges) and consider independent clinics for non-emergency care. For unresolved disputes, contact your state’s consumer protection office or file a complaint with the Centers for Medicare & Medicaid Services.
As healthcare costs continue to rise, understanding these fees empowers patients to advocate for fairer pricing—and demand much-needed policy changes. Have you encountered unexpected facility fees? Share your experience with your representatives to push for greater accountability.
See more WebMD Network
