Search Results

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: Using April 2025 Transparency in Coverage data, the researchers examine how negotiated allowed amounts for common cardiology services vary across four major commercial insurers. They find greater variation in facility fees than in professional fees for cardiology services, as well as significant differences in negotiated facility prices across payers. The researchers also find substantial variation in median professional and facility fee rates across states for coronary angiography.

Topic Areas: Payment Differentials, Vertical Integration, Facility Fees

Publisher/Organization: Center for Advancing Health Policy through Research

Payer: Commercial Insurance

Summary: Using 2023 Transparency in Coverage data and 2024 National Academy for State Health Policy Hospital Cost Tool data, the researchers estimate that a facility fee prohibition on evaluation and management services and preventive services would save approximately $348.3 million annually in the commercial insurance market across 149 hospitals in Illinois. After the ban, commercial operating margins at these hospitals would be expected to average 34.4% (down from 35.4%) and overall operating margins are expected to average 11.0% (down from 11.5%). The researchers suggest this facility fee ban could result in substantial health care savings while having a minor impact on the operating profit margins of the affected hospitals.

Topic Areas: Facility Fees, Policy Reforms

Publisher/Organization: Health Care Cost Institute

Payer: Commercial Insurance

Summary: Using commercial claims data for individuals with employer-sponsored insurance from 2018 to 2022, the researchers analyzed changes in clinician billing patterns following a health system's acquisition of an independent practice. They found that clinicians billed for higher-intensity evaluation and management visits and were more likely to order hospital-based diagnostic tests after the acquisition. However, the likelihood of billing a facility fee with an office visit did not increase following the acquisition.

Topic Areas: Vertical Integration, Facility Fees

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: The resource highlights that the same services are often more expensive in hospital outpatient departments (HOPDs) than independent provider offices. Outpatient facility fees and rising hospital prices driven by the increasing market power of consolidated health systems contribute to higher payments for HOPDs. To address this, the resource covers 16 decision points across four domains to help policymakers develop a policy solution that best fits their local needs, circumstances, and priorities.

Topic Areas: Vertical Integration, Payment Differentials, Policy Reforms, Site-Neutrality, Facility Fees

Publisher/Organization: Paragon Health Institute

Payer: Medicare, Medicaid

Summary: This paper argues that site-of-service payment differentials between hospital outpatient departments and lower-cost settings have encouraged hospitals to acquire physician practices. According to the paper, these acquisitions have contributed to rising hospital costs. To promote competition and reduce unnecessary spending, the paper recommends site-neutral payment reform for Medicare and Medicaid.

Topic Areas: Facility Fees, Vertical Integration, Site-Neutrality, Policy Reforms

Publisher/Organization: Center on Health Insurance Reforms

Payer: Medicare

Summary: The article examines a 2026 federal law requiring hospitals to use unique National Provider Identifiers (NPIs) for each off-campus hospital outpatient department paid under Medicare. Current billing practices often obscure site of care, limiting the ability of state and federal regulators to enforce facility fee restrictions or implement site-neutral payment policies. The law aims to increase the accuracy of outpatient claims data and transparency on where care is delivered. The authors argue that additional action—such as requiring use of unique NPIs across all payers and improving data systems linking provider locations to parent organizations—would increase the impact of the new policy to the commercial market.

Topic Areas: Policy Reforms, Facility Fees, Billing Transparency

Publisher/Organization: Health Care Cost Institute

Payer: Commercial Insurance

Summary: Using commercial claims data for over 55 million individuals with employer-sponsored insurance from 2018 to 2022, researchers analyze trends in hospital outpatient department use and spending. They found that outpatient facility spending grew by 18% over the period. Facility fees accounted for 86.3% of outpatient spending per enrollee. While more than 75% of visits were for lower-cost services such as lab tests, imaging, and evaluation and management, a small share of high-cost procedures—particularly major surgeries—drove a disproportionate share of spending, accounting for 22.4% of total spending despite representing only 3% of visits.

Topic Areas: Facility Fees

Publisher/Organization: Health Care Cost Institute

Payer: Commercial Insurance

Summary: This analysis examines facility fee billing for evaluation and management (E/M) visits in the commercial market. In 2022, 1.24% of E/M visits in the United States included a facility fee, with variation across states ranging from 0.25% to 5.38%. Despite relatively low prevalence of facility fees for E/M visits, the high volume of these services means facility fees still contribute meaningfully to overall spending. For example, a small decrease in the percentage of E/M visit facility fees from 2018 to 2022 reduced total facility fee spending by about $121 million. The number of facility fees for E/M visits varied by specialty, while total spending was concentrated in high-volume fields such as primary care and internal medicine.

Topic Areas: Facility Fees

Publisher/Organization: N/A

Payer: Medicare, Commercial Insurance

Summary: Using 2013-2021 Medicare claims and 2015-2018 commercial claims, the study evaluates Optum’s acquisition of physician practices and ambulatory surgery centers (ASCs). It finds no meaningful change in referrals from hospital outpatient departments to ASCs in Medicare after acquisitions. Instead, Optum acquired practices that already had high ASC use, consistent with strategic selection. In commercial markets, prices at acquired ASCs rose by 11%, driven by higher facility fees and increased professional fees for Optum-employed physicians.

Topic Areas: Facility Fees, Vertical Integration, Payment Differentials

Publisher/Organization: U.S. Public Interest Research Group

Payer: Commercial Insurance

Summary: This report analyzes the growing use of facility fees for hospital outpatient care in the commercial market. It shows that they are applied in settings without hospital-specific resources and can substantially increase charges for preventive care, diagnostic tests, and routine visits without improving quality. These fees raise out-of-pocket costs and insurance premiums. The report highlights how integration has increased physician employment by hospitals, making it harder for patients to avoid settings with facility fees. The report also reviews state legislative actions and proposes policies such as site-neutral payments, unique National Provider Identifiers, facility fee bans for routine outpatient services, and public reporting of facility fee charges and payments.

Topic Areas: Facility Fees, Site-Neutrality, Vertical Integration, Policy Reforms, Billing Transparency

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: The blog explains how facility fees result in unexpected out-of-pocket costs for consumers with commercial insurance receiving routine care, including checkups, lab tests, and outpatient visits. High deductibles and complex benefit designs leave many patients particularly exposed to these fees. The researchers highlight that hospital acquisitions of physician practices and payment differences between hospital and non-hospital settings contribute to the growth of facility fees and higher overall costs. The blog also discusses state policy responses aiming to limit patient cost-sharing, prohibit certain facility fees, and improve transparency to help consumers better understand and compare prices.

Topic Areas: Facility Fees, Payment Differentials, Policy Reforms

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: Using Hospital Medicare Cost Reports and National Academy for State Health Policy Hospital Cost Data from 2011-2022, researchers assess the financial impact of Connecticut’s ban on certain outpatient facility fees for commercial plans. Researchers do not find evidence that the facility fee ban impacted hospital operating margins. However, the findings suggest the hospitals’ outpatient charges had a relative decrease of 6.91% as a portion of total charges.

Topic Areas: Facility Fees, Policy Reforms

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: The authors review state efforts to collect and analyze outpatient facility fee data. Facility fees often make care delivered in hospital settings more expensive than in physician offices, but limitations in claims data can obscure where and how hospitals bill these fees. Colorado, Maine, Connecticut, and Washington have implemented data reporting requirements to better identify facility fee billing patterns and trends. These efforts reveal rising facility fee charges and highlight challenges such as inconsistent data across claims. Monitoring provides insight into site-of-care price differences and informs potential policy responses to improve affordability.

Topic Areas: Payment Differentials, Facility Fees, Policy Reforms

Publisher/Organization: US of Care

Payer: Commercial Insurance

Summary: This report analyzes how three payment policies—site-neutral payments, facility fee prohibitions, and commercial hospital price caps—could affect consumer costs and hospital finances in Indiana, Massachusetts, and North Carolina in 2022. The authors find that setting commercial site-neutral rates at 100% of the Medicare non-hospital payment rate for the 57 services MedPAC identified could reduce consumer premiums and out-of-pocket costs by over $840 million. Hospital operating margins in the states would also remain positive after the site-neutral reform. They also find that banning facility fees for evaluation and management, preventive, and telehealth services in hospital outpatient departments could save consumers $121-$323 million per state, while hospitals would continue to maintain positive operating margins. Finally, the report estimates that capping commercial hospital prices at 200% of Medicare rates could save over $5 billion per state without leading to negative hospital operating margins. The authors conclude that policies aimed at curbing excessive hospital payments could lower costs without threatening hospital financial viability.

Topic Areas: Payment Differentials, Site-Neutrality, Policy Reforms, Facility Fees

Publisher/Organization: Health Care Cost Institute

Payer: Commercial Insurance

Summary: This issue brief explains what facility fees are and uses visual examples to compare the cost components of a primary care office visit and a pediatric wellness visit in 2022 across care settings for patients with commercial insurance. It shows that when these services are delivered in hospital outpatient departments, facility fees make up roughly half of the total cost, significantly increasing overall prices compared to physician offices. While the professional fee in hospital settings may be slightly lower than in an office—for example, $13 less for a primary care visit—the addition of a $114 facility fee results in a higher total cost. The analysis highlights how site-of-care billing practices and facility fees drive payment differentials and increase spending for routine outpatient services.

Topic Areas: Payment Differentials, Facility Fees

Publisher/Organization: Maine Health Data Organization

Payer: Commercial Insurance

Summary: This dataset from the Maine Health Data Organization uses commercial claims from Maine’s All-Payer Claims Database and represents about 73% of commercially insured individuals in the state. It includes facility and professional payments for 109 outpatient procedures across 197 healthcare settings from July 2023 to June 2024. The dataset contains claims from 16 commercial payers, including detailed breakouts for the five largest insurers, and organizes services into categories. For each CPT code, care setting, and payer, it reports median payments, the number of episodes, and the share of total payments attributable to institutional versus professional claims. It also includes a “split billing” analysis that identifies instances where both institutional and professional claims were submitted for the same service, enabling comparisons of how payments are distributed across settings and claim types.

Topic Areas: Payment Differentials, Facility Fees

Publisher/Organization: Connecticut Office of Health Strategy

Payer: Commercial Insurance, Medicare, Medicaid

Summary: Since 2015, Connecticut has required hospitals and health systems to report detailed outpatient facility fee data from commercial payers, Medicare, and Medicaid. The data include total charges, the number of visits with facility fees by payer, and charges for the top ten procedures by revenue and utilization. The Connecticut Office of Health Strategy annually publishes reports summarizing this data. They show annual and multi-year facility fee trends for on- and off-campus hospital outpatient departments.

Topic Areas: Facility Fees

Publisher/Organization: Washington State Department of Health

Payer: Commercial Insurance, Medicare, Medicaid

Summary: Hospitals annually report data to Washington State on hospital facility fees charged at off-campus, provider-based clinics, including the number of such clinics that bill facility fees, total patient visits where facility fees were charged or billed, and total revenue generated from these fees. The reporting also includes the range of allowable facility fee payments received from public or private payers.

Topic Areas: Facility Fees

Publisher/Organization: RAND

Payer: Commercial Insurance

Summary: This study uses 2020-2022 commercial claims data from self-insured employers, state all-payer claims databases, and private health plans to analyze hospital prices. It finds that average private insurer prices were 254% of Medicare rates in 2022, with prices exceeding 300% of Medicare in some states. Hospital outpatient procedure prices averaged 263% of Medicare rates, and facility fees accounted for about 87% of outpatient spending. The researchers also find that prices at ambulatory surgery centers averaged 171% of Medicare rates. In addition, prices for private insurers averaged 281% of average sales price for hospital administered drugs, compared with Medicare's payment rate of 106% of average sales price.

Topic Areas: Payment Differentials, Vertical Integration, Facility Fees

Publisher/Organization: Colorado Hospital Facility Fee Steering Committee

Payer: Commercial Insurance, Medicare

Summary: The Colorado Hospital Facility Fee Steering Committee analyzed outpatient facility fee trends in Medicare and the commercial market using 2017-2022 data. Total outpatient facility fee reimbursements for the commercial market and Medicare grew by 6.5% per year on average. In the commercial market, professional fee payments for the 25 most frequently billed, high-reimbursement CPT codes were nearly identical for hospital-affiliated and independent providers. However, hospital outpatient departments (HOPDs)charged additional facility fees for these codes. Variations in billing practices across providers—along with incomplete facility fee data for self-funded plans—prevented the Committee from calculating total costs of care for HOPD services, limiting direct comparisons with office-based settings.

Topic Areas: Payment Differentials, Facility Fees

Publisher/Organization: Blue Health Intelligence

Payer: Commercial Insurance

Summary: Using national commercial claims data for roughly 123 million people between 2017 and 2022, researchers found that allowed costs for thousands of outpatient services were consistently higher when provided in hospital outpatient departments (HOPDs) than in ambulatory surgery centers (ASCs) or physician offices. HOPD prices also grew more rapidly over time than prices in ASCs or offices. The brief concludes that implementing site-neutral payments would generate substantial savings for patients, employers, and insurers by reducing these price disparities.

Topic Areas: Facility Fees, Payment Differentials, Site-Neutrality

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: This article provides an overview of outpatient facility fees, including when hospitals charge them. The article explains that facility fees have become more common as hospitals acquire more physician practices. This trend is driving up overall costs for commercial insurers and increasing out-of-pocket expenses for consumers. The article outlines policy options to reduce site-of-service price differentials and protect consumers in the commercial market, including facility fee prohibitions and site-neutral payment reforms.

Topic Areas: Facility Fees, Vertical Integration

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: Drawing on analyses of laws in eleven states and more than 40 qualitative interviews with stakeholders, the report details how facility fee billing practices contribute to consumer confusion, opacity in claims data, and difficulties accurately identifying where and how care is delivered. The report also assesses a range of state strategies to regulate outpatient facility fee billing, including facility fee prohibitions, consumer out-of-pocket cost protections, consumer disclosure and other transparency requirements, and hospital reporting requirements.

Topic Areas: Policy Reforms, Facility Fees

Publisher/Organization: RAND

Payer: Commercial Insurance, Medicare, Medicaid

Summary: The authors reviewed ten studies examining the price impact of vertical integration between hospitals or health systems and physicians. Eight studies reported price increases, one found no significant effect, and one reported mixed results. A major factor driving higher prices in vertically integrated entities is the shift of services to higher-cost settings where systems can bill both professional and facility fees. Similar to most of the studies on the price effects of vertical integration, nine studies found increases in medical spending associated with vertical integration.

Topic Areas: Vertical Integration, Facility Fees, Payment Differentials

Publisher/Organization: N/A

Payer: N/A

Summary: This study examines variations in emergency department facility fees for self-pay patients across hospital and regional characteristics in 2021. The median cash price for emergency department facility fees ranged from about $161 for low-acuity visits to $1,097 for high-acuity visits. Hospitals with for-profit ownership and those with higher bed counts tended to post significantly higher cash prices for facility fees across all visit levels. Meanwhile, hospitals in counties with higher poverty rates generally posted lower cash prices.

Topic Areas: Facility Fees

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: This study analyzes over 30 million office visit claims from commercial insurers between 2012-2016 to examine the relationship between hospital-physician vertical integration and prices and facility fees. It finds that higher levels of vertical integration were associated with increases in physician prices for select specialties. For example, a 10% increase in hospital-physician integration was linked to 0.5%-1.0% price increases for primary care, orthopedics, and cardiology office visits. The geographic areas with the greatest growth in vertical integration also had the greatest price increases over the study period. The study finds no association between vertical integration and facility fee billing practices for office visits.

Topic Areas: Vertical Integration, Facility Fees

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: This study examines more than 5.2 million outpatient surgeries among commercially insured patients to assess trends in total payments, facility fees, professional fees, and out-of-pocket (OOP) expenses. Total payments for surgical encounters increased by 29%, primarily due to a 53% rise in facility fees, while professional fees remained stable. Patient OOP expenses grew by 50%. Predicted payments for procedures in ambulatory surgery centers and hospital outpatient departments were higher than office-based procedures, adding $2019-$2649 in total payments and $302-$324 in OOP expenses per procedure.

Topic Areas: Facility Fees, Payment Differentials

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: Using negotiated rates from three commercial insurers from 2007 to 2014, the study compares price growth for the hospital and physician components of hospital-based outpatient services. The price of the hospital component grew by 25% over this period, and the price of the physician component grew by 6%. The hospital component comprised 79.5% of the total price for outpatient procedures. Because hospital prices grew faster and accounted for a larger share of costs, the hospital component accounted for 93.5% of the increased total price for outpatient services.

Topic Areas: Payment Differentials, Facility Fees

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: This study analyzes commercial insurance claims from 2007 to 2013 for patients treated by physician practices before and after hospitals acquired them. After adjusting for patient characteristics and market factors, hospitals increased prices for services at acquired physician practices by 14.1% and raised total enrollee spending by 4.9%. Price increases were largest in markets where hospitals had greater market share, reflecting increased bargaining power for negotiated reimbursement and the new application of facility fees. New facility fees accounted for about 45% of the increase in prices.

Topic Areas: Vertical Integration, Facility Fees