A facility fee is a charge for the place a service happened in, billed separately from the professional fee for the person who performed it. It appears when the site is licensed as a hospital outpatient department, and it is added for work that an independent office bills without it.

The reason it surprises people is that the site does not have to look like a hospital. A storefront practice a mile from the main building, with the same doctors and the same waiting room it had before an acquisition, can bill as a hospital outpatient department because that is how it is now licensed. Nothing about the visit changes; the billing does.

This is the single largest controllable variable in outpatient costs. The same MRI, the same blood draw, the same specialist consultation, the same physical therapy session can carry a facility fee or not depending only on who owns the site. Over a course of treatment with repeated visits, that compounds.

In New York: the question to ask when booking, and the one almost nobody asks, is “is this location a hospital outpatient department, and do you bill a facility fee?” Reception can answer it, and asking before the appointment costs nothing while asking afterward changes nothing.

Two New York-specific consequences follow. If the facility fee is billed by a hospital and you are uninsured, the whole bill falls under the state’s hospital financial assistance law: nothing out of pocket at or below 200% of the federal poverty level, capped at 10% of the Medicaid rate to 300% and 20% to 400%. And if the fee arrives from a site you had no way to know was hospital-based, that is worth raising with the plan and, if it stands, with the Attorney General’s Health Care Bureau Helpline at 800-428-9071.

Also called: hospital outpatient department fee, provider-based billing. Full guide: How every medical bill in New York is assembled.

More in Glossary of health coverage and billing terms

  • Aid to continue — The request that keeps a benefit running unchanged while an appeal is decided — a separate ask from the appeal itself, and the one people forget to make.
  • Workers' compensation — Not health insurance but a separate system that pays the whole cost of treating a work injury, which is why one sentence at the registration desk decides the bill.
  • Allowed amount — The number a plan treats as the price of a service, which is almost never the number on the bill and is what your percentage share is actually taken from.
  • Chargemaster — A hospital's internal list price for every service. Almost nobody pays it — except the uninsured who don't ask.
  • Balance billing — Balance billing is a provider billing you the gap between its charge and your plan's allowed amount. When New York bars it, including Medicare's 5% cap.

This page explains how the system works. It is not medical advice. More.