(C) Minnesota Reformer
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The 'facility fee': Another way hospital companies are squeezing every last nickel out of us • Minnesota Reformer [1]
['Melissa Finnegan', 'Marta Michalska-Smith', 'Ben Ruxin', 'Nathan Steeves', 'Pat Garofalo', 'More From Author', 'May', '.Wp-Block-Co-Authors-Plus-Coauthors.Is-Layout-Flow', 'Class', 'Wp-Block-Co-Authors-Plus']
Date: 2025-05-06
Have you ever heard of a “facility fee”?
Even if you haven’t, I’ll bet that you’ve been charged one without even realizing it.
Facility fees are becoming more and more common as a way for large hospital systems to charge extra for basic appointments at the clinics they own, driving up the cost of health care.
I learned about facility fees in April of 2024, after my husband took our 3-year-old daughter to a follow-up appointment for stomach pain. The clinic took her vital signs and then she played with cars on the floor while my husband and the doctor discussed her medication, eating habits, etc. It was a basic appointment that lasted about 15 minutes.
We were shocked when the bill came. We had a $201 charge for the doctor’s services, which made sense. But the bill also included a $423 charge for “outpatient hospital services.”
You can imagine our confusion since our child didn’t set foot inside a hospital for this appointment. After several rounds of customer service calls to both our health insurance and M Health Fairview, we learned that this charge was a “facility fee” that M Health Fairview was allowed to charge us because the clinic was affiliated with a hospital.
No extra care or services were provided for this fee, and the clinic is not physically located within a hospital.
Traditionally, facility fees have been used by hospitals to cover the extraordinary cost of running a highly complicated, 24/7 facility.
But in recent years, large hospital-owned systems have begun charging these fees at their affiliated clinics for routine care.
The consolidation of medical care exacerbates the problem. A 2024 study by the Public Interest Research Group found that “When hospitals acquire independent clinics and physician practices, the new owner can raise prices at those practices by charging facility fees under the new hospital affiliation. As a result, individuals and families now face these additional charges in the same clinics and doctors’ offices they have been going to for years.”
A separate 2022 study found that because of facility fees, patients with commercial health insurance pay an average of 45% more for appointments in hospital outpatient departments compared to the same services provided in freestanding physician offices.
Current state law offers inadequate protection against this practice. Minnesota law requires providers to notify patients in advance of an appointment that they may be charged a facility fee, potentially resulting in a higher out-of-pocket expense.
This even applies to telehealth appointments as well, so you don’t even have to set foot in a facility to be charged this facility fee.
The law also requires the facility to post the information on their website and in spaces accessible by patients. I asked M Health Fairview when they notified me of this charge, and their reply was that the sign at the front desk is the notification.
This bare-bones notification requirement puts the entire burden on the patient to notice and understand the sign, then do the legwork of calling their insurance company to see if they may be on the hook for an extra fee of an unknown amount.
Additionally, a complicated sign in English is not adequate notification for anyone who is visually impaired or who does not read English. Finally, while my metro-located family has the luxury of choice and were able to find another provider for our daughter who does not charge this fee, families in Greater Minnesota may not have that opportunity and end up geographically trapped into paying these higher costs.
These facility fees are another way for Minnesotans to be price-gouged out of getting the basic health care they need.
That is why I’m working with my state legislators to ban hospital-affiliated clinics from charging facility fees for routine clinical care and telehealth appointments.
Some may argue that this ban (HF1312/SF1503) would take away an important revenue stream that pays for facilities, but the proposed bill does not affect facility fees for emergency care or inpatient hospital care. Additionally, state law cannot supersede federal law, so this change will not impact Medicaid/Medicare payments to facilities.
There is still a larger debate to be had about our healthcare system and how it is funded. Major structural issues need to be addressed, not just in Minnesota, but nationwide.
In the meantime, this bill will help protect patients from a predatory billing practice.
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[1] Url:
https://minnesotareformer.com/2025/05/06/the-facility-fee-another-way-hospital-companies-are-squeezing-every-last-nickel-out-of-us/
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