The Famous “Facility Fee”

Here is a great article in Medical Economics out the “facility fee” farce by Marni Jameson Carey. Read the metaphor in the beginning because it is perfect but the crux of the issue is this:

Every day, hospitals and health systems are buying independent doctors and turning them into employed physicians. When they do, hospitals tack a facility fee onto the doctor’s fee every time he or she performs a procedure. These fees add zero value, yet the law allows hospitals to charge them to “cover overhead.” These money-for-nothing fees are one reason hospitals can afford to pay doctors more than doctors can earn on their own, and lure them out of independent practice—a trend that is unhealthy for doctors and for Americans.

It looks like CMS is finally doing something to help this but it is a law that needs to be changed.  The American Hospital Association is not just going to let that happen as they spent $22 million to get it to go their way in the first place.  While we wait for that fight there are some things, in my opinion, that we can do:

  1. Find out who is charging these facility fees and don’t send patients there if possible.
  2. Get prices from places out of town so you can let patients decide if the cost is worth the ride.
  3. Support independent and DPC docs!


Get Dr. Farrago’s book on how to start your own DPC practice here on Amazon

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  5 comments for “The Famous “Facility Fee”

  1. Jennifer Hollywood
    August 28, 2018 at 5:16 pm

    Most of the specialists in my town are owned by the single hospital in town (which is turn owned by the large university hospital in the big city.) If a patient wants to see someone NOT affiliated with the local hospital then they have to travel about an hour away. Now you are talking about a doctor’s appointment taking most of a day instead just going down the street. The loss of income and cost of driving and tolls can eat into the monetary savings of going somewhere “cheaper”.

  2. August 27, 2018 at 2:55 pm

    At Cedar Orthopaedic Surgery Center, Dr. Delcore combines the facility fee in a bundle with the surgeon’s fee, the anesthesiologist’s fee, and often the implant fee, as in case of a total joint replacement. However, his facility fee is just the cost of the surgical assistance and supplies. It is only a small part of the total combined fee. and the transparent cost (posted on the website), in many cases, is as much as 50% less than hospital charges for the same procedure.

  3. Moshe Rose
    August 27, 2018 at 10:39 am

    Can someone explain why the insurances don’t offer more money for out patient docs to keep from driving us into the arms of the hospitals and their facility fees, where the insurances will have to pay even more?

  4. August 26, 2018 at 11:54 am

    This facility fee is exactly why I cannot get a good price on a colonoscopy for my patients. All the places I have tried to negotiate with have a facility fee more than the GI doc and anesthesia fee combined!

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