Duplicate or phantom charges
Facility fee from a 'provider-based' clinic without prior notice
Hospital systems have been buying physician practices for the past 15 years. When they convert the office to a 'provider-based' clinic — meaning it's certified as part of the hospital — visits there start billing two charges: a professional fee for the doctor and a facility fee for the building. Federal rules (42 CFR §413.65) require the hospital to give patients a written notice before the visit. The notice often gets missed.
What this looks like in practice
Provider-based status (PBS) lets a hospital bill outpatient services from a physically-separate clinic as if they happened in the hospital itself — which means a separate facility fee on top of the physician's professional fee. Per 42 CFR §413.65(g)(7), the hospital must give the patient a written notice that includes (1) the fact that the practice is provider-based, (2) that the patient may incur a facility fee in addition to the professional fee, (3) an estimate of the financial impact on Medicare beneficiaries, and (4) the contact for billing questions.
The pattern: patient visits a clinic that looks and feels like a normal doctor's office. Months later, the bill shows a facility fee they didn't know to expect. They didn't receive the §413.65 notice (or it was buried in intake paperwork they didn't read). The dispute centers on whether the notice was provided as required.
How to spot it on a bill
- 01.Bill includes a 'facility fee' or 'hospital outpatient' charge for an office visit at what looks like a regular clinic.
- 02.You don't recall receiving a written 'provider-based status notice' before the visit.
- 03.The clinic's address differs from the hospital's main address, but the bill comes from the hospital.
What to write — ready-to-paste language
Replace the bracketed fields with your specific details. Send by certified mail with return receipt, or via the hospital’s patient portal if it offers documented messaging. Keep a copy.
I'm writing about the bill from [hospital] for a visit at [clinic name and address] on [date]. The bill includes a facility fee. Per 42 CFR §413.65(g)(7), provider-based clinics are required to give patients written notice in advance of the visit — including disclosure of the facility-fee charge structure and the estimated financial impact for Medicare beneficiaries. I do not recall receiving such a notice for this visit. Please send me a copy of the §413.65 disclosure that was provided, including the date and method of delivery. If no compliant notice was given, please remove the facility fee from this bill.
This is a starting point, not legal advice. Your specific situation may warrant additional details. Our scan tool drafts this letter automatically with your bill’s specifics filled in.
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Related scenarios
Duplicate charges — same service billed twice on the same bill
When the same service appears on a bill more than once — sometimes under slightly different code variants — federal billing rules give patients clear grounds to ask for the duplicate to be removed.
Phantom charges — services billed that you didn't receive
Charges for services, supplies, or medications you never actually got are some of the most common patient-side billing complaints. Federal consumer-protection law gives you the right to challenge them.
Common questions
What does the §413.65 notice look like?
What's a typical facility fee?
P.S. The dispute language above is a starting point. Bills with this pattern often have additional issues alongside it — coding errors stacked with markup, surprise bills stacked with charity- care eligibility. The scan finds all of them in one pass. Start the audit →
P.P.S.Federal law gives you these rights regardless of how the bill arrived. Insured, uninsured, in-network, out-of-network — the underlying patient-protection statutes apply.
P.P.P.S. Bills are time-sensitive. Most insurance appeals must be filed within 180 days. Charity-care discounts at non-profit hospitals are most easily applied within 240 days of the original bill. Acting earlier costs less.