Impact of Facility Fees on Healthcare Costs

You've been going to the same doctor for 10 years. Same office. Same staff. Same care. Your $15 copay becomes a $563 bill. What changed? The hospital bought your doctor's practice and started charging "facility fees" – hidden charges that can add hundreds or thousands to routine visits. Between 2012 and 2024, hospital employment of physicians more than doubled to 55%. Each acquisition creates new opportunities for surprise billing. Here's the four-step scheme hospitals use: 1. Buy independent physician practices 2. Convert them to "hospital outpatient departments" on paper 3. Keep everything else identical – same location, same staff 4. Start billing facility fees on top of professional fees The result? Patients pay hospital prices for clinic visits. Real examples from my research: • $503 facility fee for a pediatric visit • $488 for an ADHD medication appointment   • $355 for arthritis steroid injections The most absurd part? Hospitals charge facility fees for telehealth visits. You're literally at home, but somehow using "hospital facilities." In Texas, recent legislation to ban these surprise fees for preventive care and telehealth died after hospital lobbying. Meanwhile, 64% of Texans skipped or delayed care in 2023 because of cost concerns. When preventive care becomes financially punitive, we've broken healthcare. The hospital industry's defense? "We need the revenue to survive. It's an insurance problem." That's regulatory arbitrage masquerading as patient care. 74% of voters want facility fees banned for outpatient services. The patients have spoken. It's time for policymakers to listen. What's your experience with surprise medical bills? #HealthcareReform #SurpriseBilling #FacilityFees #PatientAdvocacy #HealthcareReform #SurpriseBilling #FacilityFees #PatientAdvocacy

Same procedure. Same equipment. Same patient. Same doctor. Different site of service. Same outcomes. Same risks. Different price -- 5x more expensive in the HOPD compared to the ASC. For this routine, low acuity procedure: ASC Payment: $350.84 HOPD Payment: $1736.89 Site neutral payments are a major lever regulators could pull to capture value and level the playing field for the same care in a slightly different setting. The patient complexity argument is becoming less and less valid as perioperative protocols and improved techniques support higher acuity cases outside the hospital. The cost of inefficient, expensive administrative structures shouldn't be passed on to patients, employers, taxpayers, and others if their existence doesn't improve care. Site neutral payments could also reverse the consolidation trend, making it less attractive to acquire an ASC, call it an HOPD, and raise prices 2-5x. High quality, efficient, cost-effective care shouldn't be undermined by antiquated policy. Site neutral payments are low-hanging fruit for reducing healthcare costs while maintaining access to care. Changing this rule would have a greater impact than any convoluted CMS VBC program without the increased administrative burden and random metric tracking. (Disclaimer: Payment data adapted from publicly available CMS reimbursement rates provided by a healthcare vendor. Procedure/vendor intentionally not named to keep the focus on the message.) Ge Bai Dutch Rojas Marty Makary M.D., M.P.H. #siteneutralpayments #healthpolicy

Beware "Facility Fees" Danielle Ofri in The New York Times discusses how urgent care and primary care practices that are affiliated with hospitals (and not located at the hospital) can charge hospital based facility fees for care, charges that are much higher than for care in non-hospital settings. The patient may not know that the urgent care they are accessing has this additional fee that jacks up the cost of their care. What happened to Ofri happened to me too when I needed an x-ray for an injury. Because I'm an emergency physician, I waited almost a week post injury to see if the pain and swelling went away. When it didn't, I knew I didn't need to go to an ER and instead went to a local urgent care for an x-ray, an urgent care that happened to be affiliated with a hospital system and like Ofri, I was charged a facility fee. This was an urgent care in the suburbs and I was seen by a nurse practitioner. Should have been less expensive than an ER visit but it really wasn't. We have a law that protects consumers from "surprise bills" - meaning, if you go to your local ER that accepts your insurance but the contracted ER physician practice does not accept your a insurance coverage, prior to this law, the ER practice could bill you at out of network rates. Hence the "surprise" bill. This is no longer allowed. But there are no protections from facility fees charged at non-hospital sites. Yes, many hospitals provide care to more complex patients so should be compensated for more complex care, but charging this fee at non-hospital sites for non-complex care should not be allowed. Ofri: "It’s time for Congress to protect patients from both unfair pricing schemes and health care deception." It's time for site neutral payments policy. https://lnkd.in/e6_6Debv

PLAN SPONSORS... PAY ATTENTION: Health systems are acquiring urgent care centers at breakneck speed, claiming it’s about access and convenience. I call BS - this is a straight financial play. Standalone urgent care centers, once a cost-effective alternative to the ER, once acquired by a hospital can turn that $150 visit into a $600+ visit overnight—thanks to facility fees and higher reimbursement rates. Worse, when your employee steps into a hospital-owned UCC, they become part of the system—ensuring future referrals to high-cost hospital-based care. The financial impact is undeniable. Don't believe me? Here are key questions you should be asking your TPA or data analytics vendor every quarter: ▪️ Compare urgent care visit costs before and after hospital acquisition by pulling all claims for CPT codes commonly used in urgent care settings (99202-99205, 99212-99215, etc.) and compare average allowed amounts for hospital-affiliated UCCs vs. independent UCCs over the past 12-24 months. ▪️ Track facility fees creeping into urgent care visits by searching for claims that now have a hospital outpatient facility fee (e.g., revenue codes 510, 981, or UB-04 bill types 13X/14X). ▪️ Monitor changes in acuity levels (upcoding risk): Compare the distribution of visit-level E&M codes (99204, 99205) at urgent care centers pre- and post-acquisition. ▪️ Assess referral patterns post-urgent care visit by tracking the percentage of urgent care visits that result in referrals for imaging (CPT: 70010-79999), specialist consults (CPT: 99241-99245), or inpatient admissions within 30-90 days. Why am I so cynical? First, I experienced it first hand in NJ. But don't take my word for it, a 2023 study found that when urgent care centers (UCCs) enter a market, total Medicare spending rises while mortality remains flat. Six years after a UCC enters a zip code, 4.2% of Medicare beneficiaries use a UCC annually, and per-capita spending increases by $268—amounting to $6,335 per new UCC user. Hospital stays rise significantly, with inpatient costs accounting for half the total spending increase, and ER admissions also increase. These figures are only exacerbated when the UCC is hospital owned. This data suggests that urgent care expansion—especially when owned by hospitals—is not a cost-saving measure but rather a strategic funnel to drive more revenue into hospital systems. This is not just about convenience—it’s a revenue strategy for hospitals that you’re funding. Employers, if you’re not monitoring this quarterly, you’re likely paying the price. Would love to hear from employers—are you seeing these cost increases in your data? 👇 Colton Storla, CPBS, GBDSBen ConnerDave Chase, Health Rosetta-discovering archaeologistNelson GriswoldNASHP | National Academy for State Health PolicyNational Alliance of Healthcare Purchaser CoalitionsHealth Transformation AllianceShawn GremmingerChris SkisakKaren van Caulil, Ph.D.Marilyn BartlettPeter HayesDutch Rojas.

ATTENTION MICHIGAN PHYSICIANS & PATIENTS! Patients are increasingly paying more for healthcare without receiving better care. One major reason? Facility fees. When hospitals acquire independent physician practices, they can often charge additional “facility fees” for the exact same visit, with the same physician, in the same building, simply because the doctor is working out of a different location. That creates higher costs for patients and makes it even harder for independent physicians to compete. There are currently important bills in Michigan that could help address this: • HB 5770 would ban many facility fees beginning in 2027 • HB 5709 would remove outdated Certificate of Need restrictions for imaging services like MRIs These policies matter because they directly impact physician autonomy, healthcare access, competition, and affordability. Independent physicians are being squeezed out while patients continue paying more into increasingly consolidated systems. If you care about accessible, physician-led healthcare, now is the time to pay attention to these conversations. #HealthcareInnovation #PhysicianAutonomy #HealthPolicy #HealthcareAccess #DigitalHealth #PhysicianLeadership #HealthcareReform #IndependentPhysicians #HealthcareCosts #FacilityFees #CertificateOfNeed

🏥 47% of physicians now work  For a hospital or system. What's the Impact on Cost? Unit cost is the price per service. When a physician practice is acquired by a hospital, the same service often bills at a higher facility rate. Three firms name this directly. 1️⃣ Milliman: 47%. 47% of physicians are hospital-affiliated. Site-of-care economics and facility billing become central cost levers. 2️⃣ PwC: about +17%. Provider consolidation is a named inflator, with unit cost effects on the order of 17% feeding the 2027 trend. 3️⃣ Mercer. Consolidation gives systems stronger negotiating leverage. Flagged as a structural, durable price driver. 4️⃣ Aon: indirect. Points to hospital workforce expansion enabling greater patient throughput. Consolidation pressure is implied rather than separately ranked. This is a structural shift in where and how care is billed, not a one-year price bump. As more care concentrates in hospital-affiliated settings, the same services carry higher rates, and that does not reverse on its own. Understanding the market trend is the first step. What matters more is understanding how these trends show up in your own population. That is the work I do. I dig into your data, surface the specific drivers behind your cost, and turn them into a strategy for higher quality coverage at a lower cost. 👊 Best,  Brian brightspotinsights.com Source: Aon, PwC, Mercer and Milliman 2026-2027 medical trend reports.

Patients are facing unexpected “facility fees” for routine doctor visits, even when they haven’t set foot in a hospital. This practice, known as “provider-based billing,” allows hospital-affiliated clinics to charge additional fees reserved for hospital services. As hospitals acquire more outpatient practices, these surprise charges are becoming more common. Mark and Victoria Hubert of Hobe Sound like to plan ahead, and their health care is no exception. Mark’s insurance company referred him to a neurologist near his home. It was the same doctor that his wife went to last year. “I had been to this doctor twice, so we were both floored by this,” said Victoria. “She asked me, 'What did you do? What happened?'" said Mark. “I reiterated the standard. I went and saw the doctor, paid the co-pay, and came out. There was no testing, there was no leaving his office. There was no lab work, there was no other interaction with anyone else." Victoria did some digging and discovered the "miscellaneous charge" is actually a facility fee, a charge that’s typically reserved for hospital services. Victora was dumbfounded. “I said, this doesn't make any sense. It was a regular doctor's appointment,” she said. Mark’s neurologist is affiliated with the Cleveland Clinic, and his office is located inside a Cleveland Clinic building, which means patients are now subject to what the office calls "provider-based billing." #HealthcareTransparency #MedicalBilling #FacilityFees #PatientAdvocacy #HealthPolicy #SurpriseBilling #HealthcareCosts #ProviderBasedBilling #HospitalAffiliation #MedicalDebt https://lnkd.in/gpXaqd3V