Facility Fee
A charge billed by a hospital or facility for the institutional resources used in providing a service, separate from the professional fee.
1 min read · Last reviewed May 23, 2026
At a glance
- Category
- Billing
- Primary sources
- 2
- Workspace handoff
- ask d3 →
Where this comes up
This shows up in revenue-cycle work — claim scrubbing, charge entry, posting, A/R follow-up, and month-end close. Billers and practice managers hit this term when reconciling a payment, working a denial queue, or auditing why a claim aged past 60 days.
Full definition
What it is in practice
When services are furnished in a hospital outpatient department (POS 22), Medicare pays the facility under the Hospital Outpatient PPS and the professional under the non-facility-adjusted PFS rate. Patients see this as two separate bills.
How it shows up in your practice
Provider-based clinics must charge facility fees if registered as a hospital department. Confirm POS on every encounter to match the underlying billing structure.
Sources
- CMS — Hospital outpatient G0463https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient
- CMS — Physician Fee Schedule (PFS)https://www.cms.gov/medicare/payment/fee-schedules/physician
Confirm facility billing rules in Ask D3
Open ask d3 →Related terms
- BillingPlace of Service (POS) CodeTwo-digit code on a CMS-1500 claim identifying where a service was provided.
- BillingProfessional ComponentThe portion of a procedure code (designated by modifier 26) representing the physician's interpretation or supervision, separate from the technical component.
- BillingG0463 (Hospital Outpatient Clinic Visit)HCPCS code billed by hospital outpatient departments for clinic visits, replacing the E/M codes when furnished in POS 22.
D3rx is a healthcare-billing and compliance research aid maintained by D3rx Inc. Articles are drafted by an LLM (Anthropic Claude) against primary HHS, OCR, CMS, eCFR, NIST, and state-regulator publications, and reviewed for restraint and source fidelity by the D3rx team.
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Related across the archive
- GlossaryG0463 (Hospital Outpatient Clinic Visit)HCPCS code billed by hospital outpatient departments for clinic visits, replacing the E/M codes when furnished in POS 22.
- GlossaryProfessional ComponentThe portion of a procedure code (designated by modifier 26) representing the physician's interpretation or supervision, separate from the technical component.
- GlossaryPlace of Service (POS) CodeTwo-digit code on a CMS-1500 claim identifying where a service was provided.
- GlossaryCardiac Stress Test (93015-93018)CPT codes for cardiac stress testing, with separate codes for the global service, supervision, and interpretation.
- GlossaryCharge CaptureThe process of identifying and recording every billable service furnished during a patient encounter.
- GlossaryClean Claim RatePercentage of claims accepted by the payer on first submission without edits or rejections.
- GlossaryConversion FactorThe dollar value multiplied by the geographically-adjusted Relative Value Unit to determine the Medicare-allowable amount for a service.
- BillingAWV + Problem Visit Same Day: How to Bill CorrectlyYes, you can bill AWV and a problem visit the same day. Here's how to do it correctly with modifier -25.
This glossary entry is a research aid for billing and compliance staff. It does not provide legal, medical, or financial advice and does not replace counsel. References cited link to primary sources at HHS, OCR, CMS, eCFR, NIST, and the relevant payer or industry body.