What is the difference between a facility fee and a professional fee?
A facility fee is what the hospital bills for the building, staff, equipment and supplies behind a service, on a UB-04 institutional claim. A professional fee is what the physician or other clinician bills for their own work, on a CMS-1500 professional claim. One emergency visit usually produces both, from two different billers, and the two claims have to agree on the date, the patient and the place of service.
Written by Salman Saeed, CEO and Co-Founder · Reviewed by a Certified Medical Coder · 
In short: the facility claim carries the hospital's charges under revenue codes, and the professional claim carries the clinician's services under CPT codes with a place of service. Mixing them up causes duplicate, wrong-rate and wrong-form denials.
Who bills the facility fee and who bills the professional fee?
The hospital bills the facility fee. The clinician, or the group that bills for them, bills the professional fee. Use this table at the desk when a service could go either way. The facility claim is the UB-04 (837I electronically) and the professional claim is the CMS-1500 (837P). The facility vs professional billing guide explains the reasons behind it.
| Service | Facility claim | Professional claim |
|---|---|---|
| ED visit in a hospital ED | Hospital, UB-04, revenue code 0450 with the visit code | Physician group, CMS-1500, POS 23 |
| Clinic visit in a provider-based department | Hospital, UB-04, outpatient bill type | Physician group, CMS-1500, POS 19 or 22 |
| Outpatient surgery in a hospital | Hospital, UB-04 | Surgeon and anesthesia, CMS-1500, POS 19 or 22 |
| Surgery in an ambulatory surgery center | ASC, in the professional format, POS 24 | Surgeon, CMS-1500, POS 24 |
| X-ray for a hospital patient | Hospital, UB-04, as part of the outpatient service | Radiologist's interpretation only, CMS-1500, modifier 26 |
| Inpatient stay | Hospital, UB-04, bill type 11x, paid by MS-DRG | Each physician, CMS-1500, POS 21 |
| Physician in separate office space on the hospital campus that is not provider-based | None for that visit | Physician, CMS-1500, POS 11 |
How do the two claims look side by side?
The same visit is described in different fields on each form, using a revenue code and type of bill on one and a CPT code and place of service on the other. When a payer says the claims do not match, these are the places to compare.
| What it holds | Facility claim (UB-04 or 837I) | Professional claim (CMS-1500 or 837P) |
|---|---|---|
| Type of claim | FL 4, type of bill, four digits | POS in item 24B |
| What was done | FL 42 revenue code, plus HCPCS in FL 44 for outpatient lines | CPT or HCPCS in item 24D |
| Date of each service | FL 45, a line item date for each iteration of each revenue code | Item 24A, a date for each procedure, service or supply |
| Diagnoses | FL 67 principal diagnosis and others | Item 21, up to 12 diagnosis codes, pointed to from item 24E |
| Who billed and where | FL 56, the hospital's NPI | Item 32 service location, and item 33a billing provider NPI |
Hospital outpatient bill types start with 13x and inpatient Part A bill types with 11x, according to the types of bill table in Chapter 1 of the manual. Inpatient facility payment follows the MS-DRG, which this post walks through. Details on each facility form locator are on the UB-04 revenue and condition codes page.
What does one ER visit look like on both claims?
A patient with a wrist injury is seen in a Type A hospital ED. The charges are invented for illustration only.
The facility chooses the visit level using the hospital's own internal guidelines. Chapter 4 of the Claims Processing Manual says CMS has not adopted national visit guidelines, so the facility level and the physician level can legitimately differ. The professional level is the physician's own. A payer that questions either level can use CARC 150, which says the information submitted does not support this level of service.
The radiology line has its own rule. Chapter 13 says the professional component of a radiology service is paid under the fee schedule in all settings, but for hospital patients only for an identifiable interpretation with a written report. A note such as normal EKG or fx-tibia is a review already paid through the visit, not a billable interpretation.
Which mistakes make a facility or professional claim deny?
| Mistake | What happens | Fix |
|---|---|---|
| Professional component billed on the UB-04 | Chapter 25 says the physician component must be billed to the Part B MAC to obtain payment | Remove it from the facility claim and bill it on the CMS-1500 |
| Office POS 11 on a service in a hospital outpatient department | Paid at the non-facility rate, which is wrong for that setting | Use POS 19 or 22, or 23 for a registered ER patient |
| Modifier 26 on a code that does not allow it | CARC 4, the procedure code is inconsistent with the modifier used | Check the PC/TC indicator for the code on the fee schedule file |
| Second radiology interpretation for the same ER patient | Chapter 13 says only one interpretation is generally paid, and the later claim is denied as a duplicate | Bill the second reading only with documentation of unusual circumstances |
| Hospital level and physician level compared as if they must match | Payer downcodes with CARC 150 | Appeal on the documentation for that claim's own level |
POS decides the rate. Chapter 26 says POS 19 or 22 is the minimum needed to trigger the facility payment amount for a registered outpatient, and Chapter 12 says the facility rate is paid for an inpatient or hospital outpatient regardless of where the face-to-face visit occurred.
Is a facility fee the same as the technical component?
Not exactly. The technical component is a fee schedule concept for diagnostic tests, and modifier 26 marks the professional side. The CMS RVU26D file says the total RVUs for a code reported with modifier 26 include physician work, practice expense and malpractice expense, while a code reported with the TC modifier includes practice expense and malpractice expense only.
In a hospital, the equipment and staff behind a test are part of the outpatient service on the facility claim, and only the interpretation moves to the CMS-1500. Whether modifier 26 is allowed depends on the PC/TC indicator for the code. Indicator 0 codes, for example, cannot take 26 or TC. See the modifier 26 page for the indicators.
How do you check that both claims went out?
- Pull the day's ER and outpatient encounters from the registration system, with the patient, date and department.
- Match each encounter to a facility claim, bill type 13x for outpatient, and count the lines under 0450 for ED visits.
- Match each encounter to a professional claim from the group that staffs the department, and read the POS.
- List the encounters that have one claim and not the other. Work that list weekly, because under 42 CFR 424.44 a Medicare claim must be filed no later than 1 calendar year after the date of service.
- Compare the dates of service and the patient identifiers on each pair, and fix any mismatch on the side that is wrong.
For the revenue-code side, the revenue code 0450 page lists what belongs on the ER lines, and the OPPS page covers how the facility lines are paid.
How does Nucleus Align handle both claims?
Our hospital and facility billing covers institutional (UB-04) claim preparation, revenue-code validation, submission, payment reconciliation and denial management for inpatient, outpatient and emergency care, and we also prepare professional claims on the CMS-1500. See hospital and facility billing, or book a call. More explainers are on the blog.
- Medicare Claims Processing Manual, Chapter 26, Completing and Processing Form CMS-1500 Data Set · CMS
- Medicare Claims Processing Manual, Chapter 25, Completing and Processing the Form CMS-1450 Data Set · CMS
- Medicare Claims Processing Manual, Chapter 13, Radiology Services and Other Diagnostic Procedures · CMS
- Medicare Claims Processing Manual, Chapter 12, Physicians/Nonphysician Practitioners · CMS
- Medicare Claims Processing Manual, Chapter 4, Part B Hospital · CMS
- Medicare Claims Processing Manual, Chapter 14, Ambulatory Surgical Centers · CMS
- 42 CFR 424.44, Time limits for filing claims · eCFR
- Claim Adjustment Reason Codes · X12
We check every rule, code and deadline against the official source. See our editorial policy.
Common questions
Straight answers from the team that does the work.
Ask a billing lead directly. A 20-minute call, Monday to Friday, 9am to 5pm Eastern.
01What is the difference between a facility fee and a professional fee?
A facility fee is the hospital's charge for space, staff, equipment and supplies, billed on a UB-04 institutional claim. A professional fee is the clinician's charge for their own work, billed on a CMS-1500 professional claim. Both can appear for one visit, from two billers.
02Why does a patient get two bills for one ER visit?
The hospital bills for the department and the physician group bills for the doctor, and each sends its own claim. Under Medicare rules, the physician component must be billed to the Part B MAC on a professional claim, while the hospital bills its charges separately on the UB-04.
03Does an ambulatory surgery center bill a facility fee on a UB-04?
No. Claims Processing Manual Chapter 14 says an ASC bills its contractor in the 837 professional format or, rarely, on Form CMS-1500, reporting POS 24. It is a facility, but its claim is in the professional format, so a billing system that routes every facility to the UB-04 will send an ASC claim to the wrong form.
04Which place of service does a physician use in the ER?
Chapter 26 of the Claims Processing Manual says physicians may use POS 23 for services to a patient registered in the emergency room. Registered outpatients seen elsewhere in the hospital need at least POS 19 or 22 to trigger the facility payment amount.
Talk to a billing lead.
A 20-minute call about your payers, volume and setup. Monday to Friday, 9am to 5pm Eastern.