Yes, Medicare does cover facility fees, but you’re still responsible for a share of the cost. When you receive care at a hospital outpatient department, the hospital bills Medicare separately for the use of its facility on top of whatever your doctor charges for the visit itself. Medicare Part B pays its portion, and you pay a copayment or coinsurance for the facility fee. This extra charge catches many people off guard, especially when the clinic looks and feels like a regular doctor’s office.
What a Facility Fee Actually Is
A facility fee is a separate charge that hospitals bill for the overhead costs of providing care in their outpatient departments. Think of it as a “room charge” for using the hospital’s space, equipment, nursing staff, and infrastructure. It’s billed in addition to the professional fee your doctor charges for the actual medical service.
This matters because not every medical office bills a facility fee. Independent physician offices typically submit one bill for the doctor’s services. But if that same doctor works in a hospital-owned outpatient department, the hospital sends its own bill for the facility fee on top of the doctor’s professional fee. The visit might feel identical from your perspective, but the billing structure is completely different. CMS research has confirmed that hospital outpatient departments have higher per-visit costs than private physician offices, and that cost difference flows directly to patients through facility fees.
How Much You’ll Pay Under Original Medicare
Under Original Medicare (Parts A and B), facility fees for hospital outpatient services are covered by Part B. After you meet the annual Part B deductible of $283, you typically pay 20% of the Medicare-approved amount for your doctor’s services, plus a separate copayment to the hospital for each outpatient service you receive. That copayment amount varies by hospital and by the type of service, but in most cases it cannot exceed the Part A hospital stay deductible for that year.
The key detail: you’re paying twice for one visit. You owe coinsurance on the doctor’s professional fee and a copayment on the hospital’s facility fee. Both charges apply to the same appointment. And because Original Medicare has no annual out-of-pocket maximum, these costs can add up over the course of a year if you have frequent outpatient visits, unless you carry supplemental coverage like Medigap.
Medicare Advantage Plans Handle It Differently
If you’re enrolled in a Medicare Advantage (Part C) plan, your out-of-pocket costs for facility fees may look different. These plans can set their own copayment and coinsurance amounts for outpatient hospital services, so the exact cost depends on your specific plan. Some charge a flat copay per outpatient visit rather than a percentage.
The major advantage: Medicare Advantage plans are required to cap your total yearly out-of-pocket spending, with separate limits for in-network and out-of-network care. Once you hit that cap, you pay nothing for covered services the rest of the year. Original Medicare offers no such protection on its own. If you’re someone who uses hospital outpatient services frequently, that yearly cap can make a meaningful financial difference.
Preventive Services Are Partially Protected
Many Medicare preventive services, like annual wellness visits and certain cancer screenings, are covered at no cost to you when your provider accepts Medicare’s approved amount. But “no cost” doesn’t always extend to the facility fee when you receive preventive care in a hospital outpatient setting.
For example, if a polyp is found and removed during a colonoscopy at a hospital outpatient department or ambulatory surgical center, you pay the facility 15% coinsurance. Prostate cancer screening through a digital rectal exam carries a separate hospital copayment on top of the 20% coinsurance for the provider’s services. Glaucoma screenings in a hospital outpatient setting also trigger a copayment after the Part B deductible. So while the preventive screening itself may be free, the hospital facility fee often is not. The specifics depend on which service you’re getting and whether anything beyond the routine screening occurs during the visit.
Why the Same Visit Costs More at Some Locations
Over the past decade, hospitals have been acquiring independent physician practices and converting them into hospital outpatient departments. In many cases, your doctor stays in the same building, sees the same patients, and provides the same care. But because the practice is now hospital-owned, a facility fee gets added to every visit. Patients who previously paid only a doctor’s office copay suddenly see a second charge on their Medicare statements.
CMS has been working to address this disparity. The agency has proposed “site-neutral” payment policies that would equalize payments for certain services whether they’re delivered in a hospital or an off-campus facility. The goal is to stop penalizing patients with extra copays based solely on where they receive care. CMS has described this as a move to “modernize Medicare payments” and “ensure beneficiaries aren’t penalized with additional copays simply based on where they receive care.” These reforms are still developing, but they signal a shift toward closing the gap between what patients pay at hospital-owned clinics versus independent offices.
Telehealth Facility Fees
Facility fees also apply to certain telehealth visits. When a Medicare beneficiary receives a telehealth service at an approved “originating site” (the location where the patient physically sits during the video visit), that site can bill a small facility fee. For 2024, Medicare pays 80% of that fee, up to $29.96. You’re responsible for any remaining coinsurance and any unmet deductible. If you receive telehealth from home, this particular facility fee does not apply.
How to Avoid Unexpected Facility Fees
The simplest way to avoid facility fees is to receive care at an independent physician’s office rather than a hospital-owned outpatient department. This isn’t always obvious from the outside. A clinic can look like a standalone doctor’s office but still be classified as a hospital outpatient department for billing purposes.
Before scheduling an appointment, ask the office directly: “Is this location a hospital outpatient department, and will I be billed a facility fee?” You’re entitled to know this before you receive care. CMS requires hospitals to post their prices online, including facility fees for common services, as part of hospital price transparency rules. You can look up a hospital’s pricing on its website, and if you believe a hospital isn’t posting this information, CMS accepts complaints through its hospital price transparency team.
If you already have a provider you like at a hospital-owned clinic, check whether that same provider sees patients at a non-hospital location. Many physicians split time between hospital outpatient departments and independent offices. Choosing the independent office for routine visits can save you the facility fee while keeping the same doctor.