What are facility fees? Here’s the meaning, and why patients complain

Unexpected medical bills are a persistent worry for many Americans, and a growing trend of “facility fees” is adding to the confusion and financial strain. These fees, levied by hospitals for care delivered in affiliated doctors’ offices and clinics – even when the hospital itself isn’t visited – are increasingly common, leaving patients like Suzanne Maguire of Arlington, Massachusetts, facing bills they didn’t anticipate.

The Rise of Hospital-Owned Practices

Maguire’s experience is not isolated. After receiving a routine procedure at a suburban Boston medical office, she received a second bill for an identical amount, representing a facility fee from Boston-based Mass Eye and Ear, the hospital with which the office is affiliated. Despite never setting foot in the hospital, she was charged as if she had received care there. Mass Eye and Ear stated that the medical office is a hospital-licensed facility and that its billing practices are transparent.

This practice reflects a broader shift in healthcare. In 2024, approximately 55% of doctors worked for a hospital or health system – more than double the rate in 2012. As hospitals acquire independent practices, they are increasingly applying hospital-level billing practices to routine outpatient care.

What are Facility Fees?

Facility fees can range from $50 to over $1,000 and are often applied without prior notification to patients. The U.S. Public Interest Research Group (PIRG) released its “Outpatient Outrage 2026” report on January 29, highlighting this growing trend. PIRG officials emphasize that these fees are particularly concerning because they are applied to “outpatient” care – routine checkups and preventative services – which is typically less expensive than hospital-based care.

Patricia Kelmar, PIRG’s senior director of health care campaigns, noted the irony: “The whole point of preventive care is to save costs overall and make sure people are going for regular checkups. Yet now we’re getting billed as if we’ve been lying in the hospital bed.”

The American Hospital Association (AHA) defends facility fees, stating they provide essential resources for hospitals to maintain 24/7 emergency and trauma care. The AHA also argues that hospital-owned outpatient clinics often treat sicker patients and are subject to stricter regulations.

The Financial Impact on Patients

The impact on patients can be significant. Todd Bash of West Covina, California, received a bill exceeding $14,000 in facility fees for a single injection at a hospital-owned pain clinic. While his insurer covered over $1,800, he was still responsible for more than $450 out-of-pocket. He ultimately found an independent clinic offering the same service for just $37.

Similar experiences were documented in New Mexico, where one individual was charged a $92 facility fee for a visit where the nurse practitioner’s services were billed at $73. These fees are being added to routine services like checkups, mammograms, colonoscopies, and even telehealth appointments.

Research indicates that hospital-owned outpatient departments can charge two to four times more for services compared to independently-owned physician offices, particularly for Medicare patients. This financial burden is compounded by rising healthcare costs with Americans citing healthcare affordability as their top economic worry in 2026, according to a KFF tracking poll released January 29.

What Steps are Being Taken?

Twenty-two states have enacted laws or regulations to address facility fees, aiming to improve disclosure and provide consumer protections. However, no state has yet eliminated these fees entirely. PIRG recommends a “same service, same price” standard to prevent price discrepancies. Other recommendations include requiring unique billing identifiers for all providers and public reporting of all facility charges and payments.

Increased costs for ACA insurance are also impacting affordability. KFF estimated that average costs for 22 million Americans with subsidized ACA insurance more than doubled in January, following the expiration of enhanced tax credits at the end of 2025.

Frequently Asked Questions

What are facility fees?

Facility fees are charges hospitals add to bills for care received at affiliated doctors’ offices or clinics, even if the patient never visited the hospital itself. These fees can range from $50 to over $1,000.

Are facility fees covered by insurance?

Insurers may or may not fully cover facility fees for outpatient visits. Consumers may be responsible for deductibles or coinsurance, leading to unexpected out-of-pocket costs.

What can consumers do to avoid unexpected facility fees?

Consumers should ask office staff whether they will be charged facility fees before receiving care. They can also seek out independent clinics or doctors’ offices not affiliated with hospitals.

As hospitals continue to acquire physician practices, it remains to be seen whether states will enact more comprehensive reforms to protect consumers from these unexpected charges. Will increased transparency and standardized pricing become the norm, or will patients continue to navigate a complex and often confusing billing landscape?