Is a facility fee legal?

In most states and for most services, yes. It is what Medicare calls provider-based billing: if a clinic qualifies as a department of a hospital under 42 CFR 413.65, the hospital bills a facility charge on an institutional claim and the clinician bills a separate professional fee. The status is not automatic — 413.65(b)(1) says a facility is not entitled to be treated as provider-based simply because it or the hospital believes it is, and 413.65(b)(4) presumes an off-campus site furnishing the kind of services ordinarily furnished in physician offices to be freestanding unless CMS has determined otherwise. Several states have since restricted or banned the fee for specific settings and service types; Connecticut's is the most detailed, at Conn. Gen. Stat. 19a-508c.

Does the No Surprises Act cover facility fees?

Usually not. The Act targets out-of-network billing in specific situations — emergency care, out-of-network clinicians at in-network facilities, air ambulance. A facility fee from a hospital-owned clinic that is in your network is an in-network charge, so nothing in those protections removes it. The one route it does open is for uninsured and self-pay patients: the good faith estimate under 45 CFR 149.610 must itemize expected charges, and if the final bill runs at least $400 above the estimate, 45 CFR 149.620 opens patient-provider dispute resolution.

Can I ask the hospital to waive it?

You can ask, and it is worth asking, but ask for the right thing. A facility fee is a coded, contracted line, not a keying error, so a request to delete it has nowhere to land in the billing system. Requests that do land: a review of whether the visit level was coded correctly, financial assistance or charity care screening if the hospital is a 501(c)(3), and — in Connecticut, if you are not on Medicare or Medicaid, since subsection (g) exempts those patients from subsections (b) to (f) — the reduction the statute requires the hospital to tell you about on the bill itself, at 19a-508c(d)(5). Bring the itemized bill to that conversation, not the summary statement.

Facility Fees: Why One Visit Produced Two Bills

Q: Was the hospital supposed to warn me before the appointment?

If you are a Medicare beneficiary being treated at a hospital outpatient department that is not on the main campus, the care is not something the antidumping rules at 42 CFR 489.24 require the hospital to provide, and you will owe coinsurance to the hospital as well as to the physician, then yes — 42 CFR 413.65(g)(7) requires written notice before the delivery of services, stating either the amount of your potential financial liability or, where the care needed is not yet known, an explanation that you will incur a hospital coinsurance you would not incur if the facility were not provider-based, plus an estimate based on typical or average charges. The notice must be one you can read and understand. For commercial insurance the federal rule is silent, and whether you were owed a warning is a question of state law.

One appointment, two envelopes. The first is from the doctor's practice and looks like every doctor's bill you have ever received. The second, arriving a week or so behind it, is from a hospital you did not visit — the one whose name is on the building, in an office park some miles from its main campus. It carries a single line, worded something like HOSPITAL CLINIC VISIT, and a patient responsibility figure underneath that is frequently larger than the doctor's.

Nothing went wrong. That is the disorienting part.

The charge has a name, a facility fee, and it exists because the clinic is not, for billing purposes, a clinic. It is a department of a hospital. That status has a federal definition, a set of criteria the hospital has to meet, a disclosure obligation attached to it, and a growing list of state laws chipping away at it. What follows is where that definition lives, where the fee surfaces on your paperwork, and which objections to it have somewhere to land.

Every regulation, statute and rule quoted below was open on my screen on 20 August 2026, and each link goes to the paragraph rather than to a homepage, so the wording is yours to check against what I say it is. Nothing here is legal or billing advice.

Two bills for one appointment, and only one of them is the doctor

Split the visit into what got sold. The clinician's time, judgment, and documentation is the professional fee. The room, the front desk, the equipment, the nurse who took your blood pressure, the lights — that is the facility. In a private practice, both live inside one charge. In a hospital outpatient department they are two claims, sent by two entities, often processed on two different EOB pages, sometimes arriving weeks apart.

Which is why the most common wasted week starts with a phone call to the doctor's office about the hospital's charge. They will tell you they did not bill it. They are telling the truth, and it gets you nowhere. Look at the top of the second envelope: the name and the remittance address belong to the hospital, and so does the phone number you actually need.

Provider-based is a status Medicare grants, not a fact about the building

The controlling rule is 42 CFR 413.65. Most of it is written for hospital finance departments, but two parts of it repay a patient's time.

Start with geography, which the rule defines rather than assumes. Campus means the area immediately adjacent to the hospital's main buildings, plus anything within 250 yards of them, plus any other area a CMS regional office decides case by case belongs to the campus, at 413.65(a)(2). Everything else is off-campus, and off-campus departments carry extra requirements, including the notice obligation further down this page.

The status also has to be earned, and it is not self-certifying. Paragraph (b)(1) is blunt: a facility "is not entitled to be treated as provider-based simply because it or the main provider believe it is provider-based." Paragraph (b)(4) goes further and sets a presumption against it — an off-campus facility used as a site where physician services of the kind ordinarily furnished in physician offices are furnished is presumed freestanding unless CMS determines it has provider-based status. The criteria at (d) cover licensure, clinical integration, financial integration, and one you can check from the waiting room: public awareness, under (d)(4), which requires that the facility be held out to the public as part of the main provider, and that "when patients enter the provider-based facility or organization, they are aware that they are entering the main provider and are billed accordingly."

Here is the wrinkle that surprises people. A hospital may submit an attestation and get a determination from CMS, but it is not obliged to. Paragraph (j) describes exactly what happens when a provider treated a facility as provider-based without ever requesting one and CMS later disagrees: future payments get adjusted down to freestanding levels and past ones get recovered. So there is no public registry of approved provider-based departments to look yourself up in.

What there is, is the enrollment file. CMS publishes Hospital Enrollments, refreshed monthly, listing every Medicare-enrolled hospital with its CCN, its NPI, and its practice locations tagged by type. Search your hospital's name and read the PRACTICE LOCATION TYPE column: main campus rows say MAIN/PRIMARY HOSPITAL LOCATION, and satellite sites say OTHER HOSPITAL PRACTICE LOCATION. If the street address on your second envelope is sitting in that list, the hospital is telling Medicare that address is part of it.

Where the fee actually shows up on paper

These are the markers, and each of them is checkable against paper you are able to obtain.

The place-of-service code on the professional claim. The doctor's claim carries one, and CMS's place of service code set defines them: 11 is Office, 22 is On Campus-Outpatient Hospital, 19 is Off Campus-Outpatient Hospital. Codes 19 and 22 mean the clinician was paid the lower facility rate because a facility was billing separately. A 19 on the professional bill and a facility charge on the hospital bill are the same fact stated twice.

The clinic visit code on the hospital claim. Hospital outpatient departments do not bill office visit codes. They bill HCPCS G0463, "Hospital outpatient clinic visit for assessment and management of a patient," on the institutional claim, the UB-04. CMS created that code in the CY 2014 OPPS final rule to represent all clinic visits under the OPPS, collapsing the five levels that had existed before it. So on the hospital's side of a clinic visit there is no level 3 and no level 5 to argue about; the levels you may remember belong to the professional claim.

Then there is the modifier, which matters only if you are on Medicare. In the CY 2026 OPPS rule CMS refers to off-campus departments excepted from section 1833(t)(21) of the Act as "departments that bill the modifier PO on claim lines," and to the non-excepted ones as those billing PN, a modifier the same rule glosses as indicating "nonexcepted items and services furnished and billed by off-campus provider-based departments (PBDs) of hospitals." PN lines already draw a physician fee schedule equivalent rate. That is the rule text speaking; how any individual Medicare Administrative Contractor instructs its own providers to apply the two is a separate document, and not one I have read.

To read any of these you need the line-item detail bill and the claim, not the summary statement, and that is a separate request with its own wording. It is covered in requesting an itemized bill. Do that first, because everything below depends on knowing what was billed.

The notice Medicare was supposed to give you first

If you are a Medicare beneficiary treated at an off-campus hospital outpatient department, the treatment is not one the antidumping rules at 42 CFR 489.24 oblige the hospital to provide, and you will owe hospital coinsurance on top of the physician coinsurance, then 413.65(g)(7) requires written notice before the delivery of services — either the amount of your potential financial liability, or, where the exact care is not yet known, an explanation that you will incur a coinsurance you would not incur if the facility were not provider-based, an estimate based on typical or average charges, and a statement that the real number depends on what is actually done. The notice must be one you can read and understand. If you are unconscious or under great duress, it goes to your authorized representative. In an emergency it comes as soon as the emergency is ruled out or the condition stabilized.

That paragraph is a condition of the hospital's provider-based status, not a consumer remedy. No refund is written into it. But it is a compliance obligation, and a documented failure is something CMS and your Medicare Administrative Contractor can act on. The Medicare-specific escalation ladder, with the deadline at each rung, is in the five levels of a Medicare appeal.

What changed on 1 January 2026

Medicare has been narrowing the gap service by service. Clinic visits went first: G0463 at excepted off-campus departments is paid at a rate equivalent to the physician fee schedule, which for CY 2026 works out to 40 percent of the OPPS payment.

The CY 2026 OPPS final rule (90 FR 53448, effective 1 January 2026) extended the same treatment to drug administration services in APCs 5691 through 5694 billed with the PO modifier, exempting rural sole community hospitals. CMS's own arithmetic for why: HCPCS 96413, the first hour of chemotherapy infusion, was paid around $119 in a physician office in 2025 and approximately $341 under the OPPS. The same infusion, roughly three times the price by address. The agency estimates the change saves $290 million in CY 2026, of which $70 million is beneficiary coinsurance never charged.

It is narrower than the headline. The policy runs on Medicare, so a commercial plan's contracted facility rate is untouched by it, and what it does is lower a rate rather than abolish a fee. A smaller second bill is still a second bill.

The regulation itself is moving too. The eCFR text of 413.65 as of 20 August 2026 carries a pending amendment published at 91 FR 50343 on 4 August 2026, effective 1 October 2026. It rewords the same-patient-population location tests at (e)(3)(iii) to distinguish inpatient from outpatient facilities; it does not touch the notice paragraph. Check the amendment banner at the top of the eCFR section on the day you rely on any of this.

Your state may have already outlawed the fee you were charged

This is the layer most people never check, and it is the one that regulates the hospital rather than the insurer. That distinction matters more than it sounds. Because these are hospital licensing and consumer protection laws rather than insurance mandates, they generally reach you whether your coverage is fully insured or a self-funded employer plan, unlike most of the rules that turn on whether state or federal law governs your coverage.

Connecticut has gone furthest. Conn. Gen. Stat. 19a-508c, read on 20 August 2026, requires advance written notice when a facility fee will be billed against an evaluation and management or assessment and management code (subsection (b)). It requires the facility to "clearly hold itself out to the public and payers as being hospital-based," naming the hospital in its signage, marketing materials, websites and stationery ((i)). It requires written notice displayed where patients will actually see it, "including patient waiting or appointment check-in areas" ((h)). And it requires whoever books the appointment to tell you on the phone that the place is part of a hospital, name the hospital, and give you a number to call about what you may owe ((j)).

Subsection (d) governs each initial billing statement: it must identify the fee as a facility fee, state the corresponding Medicare rate for comparison, say the fee is intended to cover operational expenses, tell you your liability might have been lower elsewhere, and give you written notice of your right to request a reduction along with a number to call — regardless of whether you would qualify for one. Subsection (l) then bans the fee outright for off-campus outpatient services billed with an E/M or A/M code, caps it at the Medicare rate for uninsured patients off campus, and since 1 July 2024 bans it on campus as well, with carve-outs for emergency departments, observation stays, and six service lines including oncology and obstetrics.

Read subsection (g) before you get attached to all of that, because it removes a large group of patients by name: subsections (b) to (f) and (l) "shall not apply if a patient is insured by Medicare or Medicaid or is receiving services under a workers' compensation plan." Notice what is not in that carve-out. The hold-out requirement at (i), the displayed notice at (h) and the notice-at-scheduling at (j) sit outside it, so a Connecticut hospital owes a Medicare patient the signage and the phone call even though the advance liability notice, the billing statement rules and the bans in (l) fall away.

Colorado went narrower. The legislature's own summary of HB23-1215, approved 30 May 2023, describes an act that from 1 July 2024 bars a provider, or a health system owning three or more hospitals, from charging a patient directly for a facility fee not covered by their insurance for preventive services delivered in an outpatient setting — with carve-outs for critical access hospitals, rural and frontier sole community hospitals and their affiliated community clinics, and Denver Health. Around that prohibition sit a notice that the provider charges the fee and a standardized bill itemizing it. There is also a provision nobody hears about until it bites: a practice newly bought by a hospital has to write to every patient it saw in the previous twelve months, and cannot collect a facility fee until thirty days after that letter goes out. Charging the fee where the act forbids it is a deceptive trade practice. I am working from the bill page's summary of the enacted act, not from the codified C.R.S. sections.

Indiana belongs here too, with a caveat about how I know it. The General Assembly's server would not serve me the enrolled text on 20 August 2026, so this comes second-hand: Georgetown's 50-state research file, dated August 2026, records Indiana's prohibition as reaching care in an off-campus office setting owned in whole or part by a nonprofit hospital system with annual patient service revenue of at least two billion dollars, and cites Ind. Code Ann. 16-51-1-0.5 through 16-51-1-12. Read the code text before you rely on that revenue threshold.

For everywhere else, Georgetown's facility fee reform tracker is the fastest way to see whether your state has anything on the books, and the statute it names is what you then read at your own state's code site.

Four angles that actually move a facility fee

Ordered by how much of the charge each one can reach, which is not the same as how easy each one is.

The setting is misrepresented. Sign, website and intake paperwork all say "Dr. Whoever's office" while the bill says hospital. That is the (d)(4) public awareness criterion, and it belongs in the letter, with photographs of the signage attached.
Your state bans or caps the fee for this service. Cite the section number and the service code off the itemized bill. This is the only angle that can zero the line.
No notice where notice was required. Medicare patients off campus under 413.65(g)(7); commercially insured patients wherever state law imposes one.
The coding is wrong on the professional side. Since G0463 carries no levels, "the level was too high" has nowhere to go on the hospital line. The physician's E/M code on the other bill does have levels, though, and a level 4 or 5 billed for a ten-minute recheck is a coding review — which both practices and hospitals process as ordinary business rather than as a dispute.

And one move that reliably fails: asking for the charge to be removed because it seems unfair. It is a contracted, coded line with a revenue code and a claim behind it, and there is no field in the system for that request. Financial assistance is the door that exists. If the hospital is a 501(c)(3), 26 CFR 1.501(r)-4 requires it to have established a written financial assistance policy, widely publicized, with a stated method of applying — which makes it a different conversation, with a different department, and one where saying the amount is unaffordable is the point rather than a weakness.

While you are comparing numbers, the hospital's machine-readable price file is public under 45 CFR 180.50, and as of 1 January 2026 hospitals must encode their organizational, or Type 2, NPIs in it, with enforcement of that revision delayed to 1 April 2026 — which makes matching the NPI printed on your bill to the right file considerably easier. If you were uninsured or self-pay for this visit, the estimate rules are a separate track entirely, and what the No Surprises Act covers is where that one starts.

Two documents to ask for this week

Request the line-item detail bill and the UB-04 from the hospital, by name, in writing, quoting the account number printed on the second envelope. Then pull the place-of-service code off the professional claim. Those two together settle the question of whether this is a provider-based clinic at all, and every angle above depends on that answer.

While you wait, spend ten minutes on your state's code site searching facility fee alongside hospital, and two more in the Hospital Enrollments file checking whether your clinic's street address is listed as a location of the hospital that billed you. Both are free, and neither requires anyone to call you back.

State legislatures move faster than this page does, and federal paragraphs get renumbered without announcing themselves. If your state has passed something that belongs in the section above, or a paragraph number here no longer lines up with the text behind its link, the contact page is where that goes. Who writes this, and on what basis, is set out on the about page.