Hospital Facility Fees Are Driving Up Healthcare Costs

Achieving healthcare price transparency has become a priority for lawmakers, and those efforts have illuminated practices that contribute to rising costs. One of these that has garnered wide attention is facility fees. 

Facility fees are an additional charge to a patient that covers the operational and maintenance costs of the building where the care was received. Hospitals typically add these to help pay for the high cost of keeping everything running 24/7, which includes things like equipment, utilities, and building maintenance.

As hospital systems have been buying more outpatient practices in recent years, many patients have received surprisingly large facility fees for common appointments and services, despite the fact that they are not performed in a hospital. For example, a woman was charged $354.68 for receiving annual arthritis injections in an outpatient health center that had previously been about $30. The hospital system changed the classification of the office from an “office-based” to a “hospital-based” setting, thus allowing them to charge a facility fee. 

Patients are being charged with these fees even when they do not set foot into a building at all. A woman in Illinois did a video call with her doctor and was charged $60 for using a “specialty room.” 

Facility fees are driving up healthcare costs for patients and other payers, often charging more than the cost of the procedure itself. For example, the national average cost of a biopsy is $146. With facility fees, that becomes $791. This means facility fees added $645, which is more than four times greater than the cost of the biopsy itself. 

As of July 2025, there are 19 states that have passed legislation to address facility fees, many of which focus on expanding transparency on when they are used. For example, states including Florida and Colorado require signs in shared areas to alert patients to being charged facility fees. Others, like Nevada and Maryland, require annual reports about facility fees to be submitted to the state. It is also common to require facility fees to be included in cost estimates for patients, such as in Alaska and Rhode Island. 

Similarly, the No Surprises Act requires providers and insurers to give patients a clear, itemized total cost of care in advance, including any facility fees, called an Advanced Explanation of Benefits (AEOB). This rule went into effect on Jan. 1, 2022, but was never implemented by the Biden administration. This could still serve as an important tool to protect patients from unexpected facility fees. 

The use of facility fees has also been banned in certain circumstances. Many states, such as Washington and Ohio, have prohibited charging facility fees for telehealth visits, although some make an exception if the provider is calling from the hospital. Texas stopped facility fees from being charged for drive-thru services, and Maine has barred facility fees for services delivered in off-campus settings. 

There is also growing interest in site-neutral payment policies, when payments are aligned across all outpatient settings for the same service. Services are more expensive when delivered in a hospital outpatient department due to higher facility fees, versus an ambulatory surgical center or freestanding doctor’s office. Site-neutral payment policies could be a way for Medicare and even private payers who implement them to achieve cost savings.

Thanks to healthcare price transparency making practices like facility fees visible to us, we can see what is driving up costs and begin working toward a better healthcare system that is more affordable, accessible, and sustainable.