Facility fees have become a controversial component of the reimbursement structure for ASCs as some advocates say they disincentivize patients from utilizing lower cost settings for surgical procedures.
“I call it a double whammy,” Kara Newbury, chief advocacy officer for the Ambulatory Surgery Center Association, told Becker’s in reference to a Medicare policy affecting coinsurance payments for certain outpatient procedures. For many CPT codes, Medicare beneficiaries are responsible for paying 20% of the procedure costs — but this responsibility is capped in the hospital setting. The cap for 2026 is $1,736 — but unlike ASCs, hospitals are “made whole” by the Medicare program after the patient cap is met
This policy amounts to a “double whammy” for ASCs because not only are procedures pushed towards more expensive inpatient care facilities, but those facilities are then compensated by Medicare rather than the patient.
ASCs are likely to see this policy affect higher-cost procedures, particularly in cardiology, orthopedics and those involving devices or implants, she added. For example, according to CMS’ procedure price lookup tool, a total knee replacement costs $10,552 in the ASC, compared with $14,275 in the HOPD. Despite the lower overall cost, patients pay $142 more in ASCs due to the lack of a coinsurance cap.
The controversy surrounding facility fees has made its way into state legislatures.
In North Carolina there is an ongoing dispute between hospital and health plan leaders over the use of facility fees in outpatient billing. Last year, the Senate passed a bill that would restrict facility fees to only being charged when patients are treated at hospitals, facilities with emergency departments or ASCs. Hospitals would no longer be able to add a facility fee to bills from a clinic or physician’s office under the proposal. But the bill has yet to move forward in the legislative process.
According to research published by Washington, D.C.-based Georgetown University’s Center on Health Insurance Reforms, there are currently nine states that prevent providers from charging outpatient facility fees for specified procedures and care settings.
Here’s a breakdown of what those state policies look like:
- Connecticut: Facility fees are prohibited for outpatient services at on- and off-campus hospital-based facilities that use a CPT Evaluation & Management or Assessment and Management code, excluding emergency departments and certain observation stays. Facility fees are also prohibited for telehealth.
- Indiana: Facility fees are prohibited for care given 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.
- Maine: Facility fees are prohibited for service provided in office settings, whether or not physically located within a facility.
- Maryland: Facility fees prohibited for telehealth services unless the provider is not authorized to bill a professional fee separately for the service.
- Mississippi: Facility fees are only prohibited for telehealth services.
- New York: Facility fees are prohibited for preventive care services as defined by the U.S. Preventive Services Task Force.
- Ohio: Facility fees are prohibited for services provided at primary care medical practices owned or operated by a hospital or health system. The regulation only applies to primary care practices previously owned or operated by a physician or a physician group purchased by a hospital or health system after Jan. 1, 2010. Providers are also prohibited from requesting facility fees for telehealth services.
- Texas: Facility fees are prohibited for drive-through services at freestanding EDs, including testing and vaccinations.
- Washington: Facility fees are prohibited for distant sites and hospitals that are the originating site for audio-only telemedicine services.
