Does Health Insurance Cover Facility Fees?

Healthcare consumers often encounter complex billing practices, and facility fees can be confusing. These charges are a distinct component of a medical bill, separate from professional service fees. Understanding how these fees apply and whether health insurance covers them is important for managing healthcare costs. This article clarifies the nature of facility fees, how insurance plans address them, and practical steps patients can take.

What Are Facility Fees

Facility fees are charges levied by a healthcare institution, such as a hospital or a clinic affiliated with a hospital system, for the use of its premises, equipment, and support staff. These fees cover the operational costs of maintaining a healthcare setting, including utilities, administrative staff, and specialized equipment. They are billed independently of professional fees charged by healthcare providers.

These fees commonly apply in various outpatient settings owned by hospital systems. Examples include outpatient hospital clinics, emergency room visits, urgent care centers, diagnostic imaging centers, and ambulatory surgical centers. Even a standalone doctor’s office might charge a facility fee if it is hospital-owned.

The rationale for facility fees stems from the higher overhead of operating a hospital-based facility. These facilities must meet stringent regulatory standards and maintain 24/7 readiness for emergencies. While professional fees compensate the individual provider, the facility fee ensures the hospital sustains the infrastructure and resources for comprehensive care. Patients often receive two separate bills for a single visit: one for professional services and another for the facility fee.

How Insurance Plans Address Facility Fees

Health insurance plans address facility fees as part of their overall coverage, but the extent varies significantly. A facility’s in-network or out-of-network status plays a substantial role in determining coverage levels and a patient’s out-of-pocket responsibility. In-network facilities generally result in higher coverage and lower patient costs due to negotiated rates.

Cost-sharing mechanisms, such as deductibles, co-payments, and co-insurance, apply to facility fees just as they do to other medical services. A patient might need to meet a specific deductible before insurance covers facility fees. Once the deductible is met, a co-payment or co-insurance may still be required. A plan can apply a separate deductible or a different co-insurance rate to facility fees compared to professional fees for the same visit.

The type of insurance plan, such as a Preferred Provider Organization (PPO), Health Maintenance Organization (HMO), Exclusive Provider Organization (EPO), or Point of Service (POS) plan, also influences how facility fees are covered. Some plans might cover facility fees fully, partially, or not at all, depending on the service and facility type. For instance, preventive services in a hospital outpatient department might be subject to a facility fee, even if the service itself is covered at 100%.

Proactive Steps to Understand Coverage

Understanding potential facility fees and their insurance coverage requires proactive steps before receiving medical services. Contact your health insurance provider directly to inquire about coverage for specific procedures at particular locations. When speaking with a representative, provide the exact service you will receive and the facility’s name and address.

Ask specific questions like, “Will a facility fee be charged for this service at this location?” and “How will my plan cover this fee, including any deductibles, co-payments, or co-insurance?” This clarifies your financial responsibility. Inquire about specific billing codes (CPT codes) for accurate information. Contacting the healthcare provider or the facility’s billing department beforehand can also provide estimates of potential facility fees and their billing practices.

Review your insurance plan’s Summary of Benefits and Coverage (SBC) and other policy documents. These documents often contain detailed information about how different types of charges, including facility fees, are covered. Look for sections detailing hospital outpatient services or specific facility charges. If possible, request information regarding potential facility fees and your estimated out-of-pocket costs in writing, as this can serve as a reference if discrepancies arise later.

What to Do After Receiving a Bill

Upon receiving a bill that includes a facility fee, first review your Explanation of Benefits (EOB) from your insurance company. An EOB is a statement detailing how your insurance processed a claim, including what was covered, denied, and your remaining financial responsibility. Compare the EOB with the facility’s bill to identify discrepancies or unexpected charges.

The EOB typically lists the services provided, the amount billed by the provider, the amount your insurance covered, and the amount you owe. Pay close attention to billing codes and remark codes on the EOB, as these explain why certain charges were paid or denied. If the facility fee appears incorrect or unexpectedly high, request an itemized bill from the facility for a detailed breakdown of every service and fee.

If you believe an error occurred or the insurance decision is unfair, appeal the insurance company’s decision. This process involves submitting a formal appeal with supporting documentation, such as the itemized bill and any communication with the facility or insurer. If the appeal is denied, an external review may be an option. If coverage is less than anticipated, negotiating with the facility’s billing department can sometimes lead to a bill reduction or a manageable payment plan, especially for non-profit hospitals with financial assistance programs.