As hospitals focus more on whole person care, population health, and preventive care to keep people healthy and out of the hospital, more services are being offered by hospitals in community settings that increase convenience and access for patients.
Patients who receive care at a hospital outpatient setting or a physician’s office are typically charged a “professional fee” for the doctor, nurse practitioner and/or physician assistant who provided care, and a “facility fee” or technical fee that pays for everyone and everything else that supports care delivery, including other clinical staff such as nurses, technicians, and medical assistants, and other costs like medical records, equipment, and supplies.
Facility fees pay for many elements of care and the healthcare workforce that are integral to care delivery. But there is frequent misinformation and questions raised about what these fees are and why they are shown separately on a bill. Here’s what patients should know.
Why am I seeing this fee at a hospital-owned facility, and not from other providers?
While independent healthcare providers often bundle these payments as one fee, hospitals and their outpatient care centers are required by Medicare and Medicaid to bill these fees separately, and this convention is generally followed by commercial payers. For this reason, even those with commercial insurance will often see separate bills. Additionally, state law requires hospitals to send notices to patients who could potentially see a facility fee on their bill.
What exactly is included in a facility fee?
Nurses, registration aides, lab technicians, patient care technicians, biomedical support, medical records, information technology, cybersecurity, rent, insurance, utilities, maintenance staff, security, medical supplies, and equipment are all costs that are separate from your doctor’s professional fee, and are therefore covered through facility fees.
How do facility fees support access to care?
Facility fees enable hospitals to provide access to a broad range of patients. They are able to serve patients with more serious and complex needs and more patients from medically underserved populations (e.g., Medicaid) than independent community practices and surgery centers. By doing so, hospital patients avoid inpatient and emergency care and it keeps costs more manageable for everyone.
Hospital outpatient departments also are held to more rigorous licensing, accreditation, and regulatory requirements than independent healthcare providers.
Does insurance cover facility fees?
In most cases, yes. This is a vital part of care, and insurance typically cover these fees though they may be subject to deductibles and co-payments.
Facility fees cover the costs of many essential care components in healthcare delivery. Having a nurse available to check your vital signs, keeping the lights on in a physician’s office that is accessible to the local community, and being able to stock the needed medical supplies and maintain innovative equipment used to diagnose and treat patients are all essential elements of an outpatient visit.
Paul Kidwell is Senior Vice President, Policy of the Connecticut Hospital Association.