What is a Facility Fee?

One of the most vexing and controversial line items in all of healthcare is the facility fee.  It confuses patients and often includes exorbitant charges that have no connection to reality.

Facility fees are most common when a hospital is involved.  Facility fees are the charges for the use of a facilities and equipment.  For example, if you have a surgery done in a hospital, your plan will be charged a Professional Fee by the surgeon and anesthesiologist as well as a Facility Fee by the hospital.

Many are shocked at how large those facility fee figures can be.  According to Healthcare Bluebook, a fair price for a Spinal Fusion in Raleigh, North Carolina is $41,305.  Of that total, $35,701 is the Facility Fee, $3,334 is the Surgeon’s fee, and $2,270 is the Anesthesiologist’s fee.

These massive facility fees have been increasing and causing health insurance premiums to continue to rise.  But, on a positive note, many surgeries that were previously done only in a hospital setting are now done in an outpatient setting.  In fact, today the occupancy of an average hospital hovers around 60% and is in decline. 

Many of these outpatient surgeries are done at Ambulatory Surgery Centers (ASC’s).  ASC’s typically have facility fees that are far lower than Hospital Outpatient Departments (HOPD’s).  ASC’s are typically physician-owned, but can be owned by hospitals as well.  The same surgery may be twice as much at an HOPD as an ASC.  However, not all surgeries can be done in ASC’s.  ASC’s can only hold patients for 24 hours.  They are most suited for high-volume, more routine procedures that have minimal complications.