Facility Fee

A facility fee is the charge a hospital or surgery center bills for the building, the room, the nursing staff, the equipment and the supplies used during your visit. It is separate from the doctor's bill. When you have a procedure, you usually get two bills for the same CPT code: one from the facility and one from the physician who did the work. The facility fee is the first of those two, and it is almost always the bigger one.

Where this bites people is the outpatient clinic that a hospital has bought. The same dermatologist in the same office, seeing you for the same rash, can start billing a facility fee the day the hospital takes over the practice. I've seen a $180 office visit turn into a $180 professional fee plus a $420 facility fee overnight, with nothing changing except the name on the door. For surgery, the gap is bigger. A colonoscopy at a hospital outpatient department in Texas commonly carries a facility fee of $1,500 to $3,000 on top of the gastroenterologist's fee, while a freestanding surgery center down the road charges $400 to $900 for the same room and the same hour. Medicare and most commercial plans pay hospitals more than surgery centers for the facility portion, which is why hospitals keep buying practices and why the "site of care" matters so much to what you pay.

The takeaway: before any scheduled visit or procedure, ask two questions: "Will there be a facility fee?" and "What is it?" If the answer is yes and the number is large, ask whether the same doctor works at a freestanding office or surgery center where the fee is lower or does not exist.