Hospital-Owned Clinics Routinely Add Facility Fees to Consumers’ Bills

By Consumers for Quality Care, on October 9, 2024

Consumers in North Carolina and across the country are being charged hospital facility fees for services and procedures conducted in clinics and outpatient centers owned by hospital systems, even when those facilities are not located in a hospital building or on a hospital’s campus, according to a joint report from The Charlotte Ledger and NC Health News. 

Rebecca Smith, a cancer survivor, requires regular checkups and blood work. Until recently, her visits to Lake Norman Oncology cost her $75. But then the clinic was purchased by Novant Health, a hospital system. On her last visit, Smith was charged $400, since Novant was now able to tack a hospital facility fee to any service or procedure, even including those performed at outpatient facilities far from their hospital campus.  

“It was like a bait-and-switch,” Smith said. “I’m going to the same office. I’m seeing the same doctor. I’m having the same follow-up appointment I always have — and then, all of a sudden, they changed the billing. I felt like what they did was really dirty.” Smith still refuses to pay the facility fee. 

Hospitals argue that facility fees are necessary to cover the cost of specialized medical equipment not typically found in other facilities. But increased consolidation has led to hospital systems’ adding facility fees to medical bills incurred in any facility they own, such as a clinic or a physician’s office. Hospitals learned years ago that if they purchased physician-owned facilities, they could receive greater reimbursements from the federal government to administer the same care in these offices. Now, 77 percent of physicians work for either a hospital or corporate entity, up from 25 percent just 12 years ago.  

These facility fees increase costs for consumers. In North Carolina, the price of an ultrasound more than doubles when facility fees are added to the bill. The cost to see a physician increases by 43 percent. One consumer’s colonoscopy in the Charlotte area resulted in a $10,000 bill – with the facility fee comprising more than half the amount. 

Fifteen states have already introduced bills or passed new laws to stop hospitals from abusing these fees. Some states prohibit the use of facility fees for certain services conducted outside a hospital, while other states require hospitals to inform consumers ahead of time whether facility fees will be charged. State lawmakers in North Carolina are working to pass a law to address facility fees. But they’ve yet to succeed, as the hospital industry works to block reform efforts. 

CQC urges health care systems to stop charging absurd facility fees and urges lawmakers to combat this and other practices that increase health care costs for consumers.