Facility fees are additional, often hidden charges tacked onto medical bills simply because a clinic or doctor’s office is owned by a hospital system. They are bad for patients because they significantly inflate the cost of identical routine care and cause unnecessary medical debt. It is a fee that does not benefit the patients whatsoever.

The primary reasons why facility fees have become a major point of consumer frustration include:

• Inflated Costs for Identical Care: You can be charged a facility fee for a routine check-up or a simple injection, simply because the doctor’s office was acquired by a hospital. A facility fee can increase the total cost of a standard service by up to 60-70% compared to visiting an independent physician. Source: Health Care Cost Institute, “Prices in Hospital Outpatient Departments are Consistently Higher than Physician Offices among Site-Neutral Services”, August 13, 2025. https://healthcostinstitute.org/all-hcci-reports/trends-in-utilization-and-prices-for-site-neutral-services-in-hospital-outpatient-and-physician-office-settings/
• Unexpected Bills: Patients routinely receive two bills for a single visit – one for the provider’s time and another for the facility itself. These extra fees frequently catch patients off guard, particularly when they are surprised to learn that their regular neighborhood clinic is now considered a “hospital outpatient department.”
• High Out-of-Pocket Burden: Even when a patient has insurance, payment structures often leave consumers entirely responsible for the facility fee portion of the bill.
• Driven by Hospital Consolidation: Facility fees are widely viewed as a symptom of unchecked healthcare consolidation. Large health systems buy up independent practices and subsequently charge higher facility fees under the new hospital brand, pushing up overall healthcare costs for consumers and employers alike.

By the numbers:

• The Health Care Cost Institute estimates facility fees increase patient costs across the board by at least 27%.
• One study suggests health systems use facility fees to help increase the cost of chemotherapy and mammograms by 40% to 320%.
• When the state of Colorado collected data, they found patients charged an extra $13.4 billion via facility fees from 2017 through 2022.
• In Michigan, corporate profits have skyrocketed, with the average operating profit margin climbing to 16%. Large urban corporate health systems in Michigan are raking the profits in even faster, with a 20% profit margin in 2024.

Support Michigan House Bill 5770 and have Michigan join several other states across the country who have passed legislation to protect patients, employers, and working families from the burden of facility fees.