How facility fees are driving up the cost of routine care

Imagine seeing your family doctor for a routine visit. Same doctor, same exam room you've been to dozens of times.

Then two bills arrive.

The second bill — for a "facility fee" — comes from a hospital you never visited. 

Welcome to the confusing world of facility fee billing, where hospitals can quietly change how much you pay for everyday care. 

What's happening 

When hospital systems buy independent medical practices, those offices can be reclassified as hospital outpatient departments. That administrative change allows providers to bill not only for your clinician’s services, but also for the "facility" — even though nothing about your visit has changed. 

Facility fees are meant to cover hospital operating costs like licensing, regulatory requirements and general overhead. But when applied to routine office visits that don’t require hospital-level resources, they become an affordability problem hiding in plain sight. 

The numbers tell the story 

Recent research from the Health Care Cost Institute (HCCI) sheds light on how widespread this practice has become.

In 2022, just 1.24% of routine office visits nationwide included a facility fee. That may sound small — until you consider how many office visits happen every year. 

Primary care alone accounts for one-third of all office visits. Even though fewer than 1% of those visits included facility fees, the volume translated into more than $65 million in added charges. 

Where you live also matters. HCCI found state-by-state variation, with patients in some states far more likely to encounter facility fees than others for the same type of care. Geography increasingly influences what people pay. 

Why this matters for affordability 

Facility fees make health care harder to navigate and harder to afford: 

• Unanticipated charges. Most patients don't know a facility fee is coming until the bill arrives, making it nearly impossible to budget or comparison shop. 
• Higher prices without added value. People end up paying hospital prices for office-based care, often with no clinical justification or improvement in quality. 
• Routine care becomes expensive. The largest share of facility fee spending comes from common services like primary care and internal medicine — exactly the visits people rely on for preventive care and chronic condition management. 

HCCI also found many facility fee claims showing $0, creating confusion about whether charges were paid elsewhere, denied or bundled into other bills. This lack of clarity makes it difficult for patients to understand their true costs. 

There's good news 

From 2018 to 2022, facility fee billing declined modestly nationwide —about $121 million — suggesting that increased attention is starting to make a difference. 

As of today, 20 states have passed legislation addressing facility fees through restrictions, advance notice requirements and data collection. Congress is also paying attention, proposing changes that would make hospital billing more transparent though no federal action has been finalized yet.  

What can be done 

Improving affordability will take action on several fronts: 

• Transparency first. Patients should receive advance notice when a facility fee applies and a clear explanation of why. 
• Site-neutral payments. Paying the same amount for the same service, regardless of location, removes the incentives to bill routine office visits at hospital rates. 
• Smarter care navigation. Employers and health plans can help guide people to lower-cost settings for services that don’t require hospital infrastructure. 

The bottom line: Patients are increasingly paying hospital prices for office-based care, often without knowing it. But this trend isn't inevitable. With smarter policies and better transparency, routine health care can remain affordable and predictable — without unexpected charges.