Facility vs Non-Facility Medicare Reimbursement

What Facility and Non-Facility Settings Mean

A non-facility setting usually refers to physician-owned or office-based care, while a facility setting generally refers to hospitals, outpatient departments, and ASCs where overhead is handled differently.

Why Reimbursement Differs Between Them

The Practice Expense RVU often changes by site of service. Because Medicare payment is RVU-based, this adjustment can make the same CPT code reimburse differently in office versus facility settings.

Common Clinical Settings

Private practice office (non-facility)
Hospital outpatient department (facility)
Ambulatory surgery center (facility)
Hospital inpatient unit (facility)

How Site of Service Affects Payment

Site-of-service designation impacts the PE component, which then flows through the full payment formula. To understand the full mechanics, see How Medicare Fee Schedules Are Calculated.

Example Comparison for a Common CPT Code

For CPT 99214, non-facility reimbursement is often higher than facility reimbursement because the practice bears more direct overhead in office settings.

You can also compare with nearby E/M codes like 99213 and 99215 to see how complexity and site of service interact.