Outpatient outrage: Hospitals charge fees for care at the doctor’s office

More patients are seeing extra “facility fee” charges on their medical bills

This new report explains why facility fees are increasing in frequency and the impact they have on costs.

worried couple at table poring over medical bills
ridofranz | iStock.com
Maribeth Guarino

Former High Value Health Care, Advocate, U.S. PIRG Education Fund

UPDATE 5/1/2024: Since this report was issued in March 2024, Maine has passed a new law on facility fees that requires disclosure of whether a location charges a facility fee.

Imagine going to the same doctor for ten years. They do your annual physical, they check out your wrist when you injure it, they provide your prescriptions to control your high cholesterol. For each of these visits, you have paid your $15 copay and gone home. 

Now imagine going to the same doctor for this year’s physical, paying your copay, and a few days later getting a second bill for $100. You have never gotten this charge before, so you are confident that it is a mistake. But the provider says you owe it because the office is a hospital facility. It turns out that in the past year, the local hospital purchased your doctor’s practice, and the $100 is the “facility fee”, or “facility charge”. You are on the hook for an extra $100. You’ve just become an outraged outpatient – and unfortunately, you’re not alone.

Facility fees pose a problem for patients, insurers, and the health care system overall.

Hospitals charge these fees as well. But as the health system consolidates and hospitals buy up physician practices and clinics, more patients than ever are facing facility fees on bills for regular doctor visits. These added fees are unrelated to the cost of the care we receive, and can be merely based on changing ownership of the provider’s office. There is no evidence that shows these fees improve the value or outcome of health care services; facility fees simply improve the profit line for health care companies that own the different care locations.

Facility fee amounts vary tremendously, from minimal charges to thousands of dollars. If a patient has several appointments in a year, those additional fees can really add up. Even if insurers were to pick up the tab for facility fees, those costs incurred by thousands of patients likely would be passed on to patients in next year’s premium. In Connecticut, facility fees generated over $400 million in 2021 alone. No one should be paying these unjustified fees.

This map shows the 15 states that have passed facility fee laws as of March 2024.

15 states have taken action to address facility fees, but in most cases, it’s not enough. The report digs further into each state’s laws, and categorizes the kinds of action they’ve taken to protect patients from facility fees.

This report explains why facility fees are increasing in frequency and the impact they have on costs. We review federal policy proposals and describe the steps some states have taken to address this growing problem. We also take a closer look at Connecticut, the state with the most comprehensive laws and public data on facility fees.

How decisionmakers can put an end to these unjustified facility fees:

1. Ban facility fees

Facility fees are unnecessarily adding costs to patients and insurers, with no added benefit in quality of care. There is no excuse for tacking on additional, inconsistent fees that only serve to raise the overall cost for patients and payers.

Policymakers should focus on the ultimate goal of creating an honest billing system. Patients should know what to expect and understand their bill, and should only pay for the costs of the care they received.

2. Collect data on the frequency and cost of facility fees.

Policymakers should establish data collection systems to fully capture the impact of facility fees on patients and their insurers. Even a one-time study to collect data on facility fee charges and payments would help provide context for public policy solutions. 

Better data doesn’t solve the issue, but it can help lawmakers make more informed decisions about the best way to solve the high cost of unjustified facility fees – and transparency makes it plain that no one should be paying them.

3. Inform patients about facility fees and whether their insurance will cover that charge in advance.

Disclosure of facility fees is an intermediary step to protect patients while a state pursues other more comprehensive and effective solutions. Providers should inform patients of facility fees at the time of scheduling care, and again at the office on the day of service. The notice should include the fee amount and help the patient understand whether their insurance will cover that fee. In addition, any facility fee should be clearly identified in a standardized line-item format on a bill so patients can know the reason for the charge and the amount they were actually billed.

However, notice is not sufficient. Notice ensures patients can take appropriate steps to budget or avoid excess fees when possible, but does not solve the problem.

Download the full report at the top left of this page.

Share your facility fee story with us here.


Maribeth Guarino

Former High Value Health Care, Advocate, U.S. PIRG Education Fund