Patients who visit hospital-owned doctors’ offices are discovering something that could make them feel sick to their stomach: a surprise “facility fee” unrelated to the medical treatment they receive.
The charges — which can range from $25 to thousands of dollars — are typically showing up on patients’ medical bills following an annual physical exam, strep throat test or telehealth appointment, according to a report from U.S. PIRG.
Facility fees are intended to help hospitals offset their high overhead costs, including overnight care, use of specialized equipment and other expenses that make them costly to run. But when hospitals acquire independent physician clinics that don’t face hospital-scale expenses, patients may still be hit with those charges even in outpatient settings.
“They’re being charged for overhead costs that are entirely unrelated to the care they received,” U.S. PIRG said in the report.
For patients, facility fees drive up medical costs and even dissuade some people from seeking care, the nonprofit consumer advocacy group found.
“We don’t want to pay hospital fees for services that we never stepped into the hospital for. It’s driving up prices and causing people to hesitate to get their regular treatments and checkups,” Patricia Kelmar, senior director of health care campaigns at U.S. PIRG and one of the authors of the report, told CBS News.
Facility fees first started appearing in 2023, and have become increasingly common as hospitals acquire more independent physician practices. Roughly 50% of community practices are owned by hospitals, making such fees unavoidable for many consumers, according to U.S. PIRG.
“A patient has an annual physical or a follow-up, and because the doctor they’ve been going to for years is now owned by a hospital that’s taken over billing, it can charge facility fees,” Kelmar said.
Adding to the frustration for patients is that only a handful of states require hospitals to notify them in advance of the extra charge.
“People don’t know before they go, or they see a sign in the doctor’s office after they have taken off work, hired a babysitter, that says, ‘This place may charge a facility fee,’ with no dollar amount,” Kelmar said. “Day-of notice is no help. At that point, it’s too late.”
“We were never notified”
Beth Davis of Mentor, Ohio, describes her shock and confusion over getting hit with a four-digit facility fee. She told CBS News that she visited a local hospital-owned doctor’s office to seek treatment for carpal tunnel syndrome, a condition that causes wrist pain. She received a cortisone shot, followed by a second injection one month later.
The bill for the second shot totaled $2,667.45, according to a copy of Davis’ explanation of benefits from her insurer viewed by CBS News. The facility fee, described on her bill as an “Ancillaries and Observation Room” charge, totaled $2,418. “Clinic” costs were $156, while a “Pharmacy” charge was $93.45.
“I wasn’t even observed. The doctor walked in and gave me a shot — there wasn’t even an assistant,” Davis told CBS News.
Her insurer covered about $1,000 of the medical costs, leaving her responsible for $1,618, which David said she is refusing to pay because she doesn’t believe it’s justified.
“I didn’t even know such a thing existed. We were never notified of this charge,” she said.
Stronger rules needed
In 21 U.S. states, consumers have at least a measure of protection from facility fees. Of those states, nine bar such charges in outpatient facilities, but only for certain types of care. Thirteen states require providers to notify patients that such fees apply.
But Kelmar thinks existing regulations don’t do enough to shield consumers from the surprise fees.
“It’s just undermining the whole system. We have to get rid of facility fees and encourage more states to collect data and require more hospitals to report the fees providers are collecting,” she said. “We need some level of reporting. People need to know.”
Two-thirds of Americans say they are very or somewhat worried about affording health care, topping concerns about paying for groceries, utilities or housing costs, according to a recent poll from health policy research firm KFF. Among those, one-third described themselves as very worried about paying for medical expenses.
