A class action lawsuit has been filed on behalf of members of NYOBS against United Healthcare. The case is in the early stages, but is progressing. There will likely be advantages to being a member of NYOBS as this lawsuit progresses.

We have been able to identify means for OBS facility fees to be paid by many insurance companies.  That information is available to members.  If you wish  to become a member,  you can register at our member registration page.  If you were already a member of NYOBS and your membership has expired, please renew your membership now.

Some OBS facilities have received refund requests from insurance companies.  We have several suggestions about how to successfully handle this, but you must be a member of NYOBS to see that information on this insurance page.


This section is set up for members only. Please do not share this information, since we would like to encourage non-members to join in order to be able to have access to this valuable information.

Coding for UB-04

The UB-04 form, which is used for facility billing, is a much more complicated form than the HCFA-1500 form. There are numerous pitfalls involved in filling out the form. As a result, we usually suggest that you let a billing company file the form for you. If you wish to do it yourself, there are a number of helpful manuals on the website if you do a search under UB-04 help. One example of such a manual is at

If you decide to file the claim yourself, please do not use code 0831 for the “type of service code” in position FL-4 on a UB-04 form. Use of that code is reserved for “Ambulatory Surgical Center Services to Hospital Outpatients”. We are concerned that if you use that code and are audited, insurance companies will maintain that you have claimed that surgery was performed in an ambulatory surgery center and will be more likely to be successful in recoupment of facility fees which they have paid. We are aware of billing companies which have used that code. One of the codes which has been used is 0891 which is a nonspecific code for special facility-other.

Class action lawsuit against United Healthcare

A class action lawsuit was filed against UnitedHealthcare on July 1, 2016 by NYOBS on behalf of our members for non-payment of facility fees for office based surgery. We are hopeful that there will be an eventual settlement. The suit was filed by the same attorney who previously filed a successful lawsuit against United. Claims involved will go back to at least 2010 and possibly longer.

In order to protect your interests, there are several things which you need to do going forward. Please make sure you file claims within the period allowed under the patient’s contract, which can be as short as 120 days, but varies with the contract. Once you receive the first denial, you must file an appeal within 180 days. Once you receive a denial for the first appeal, you must file a second appeal within 60 days. There will occasionally be exceptions to the above rules, but you should follow them as a guideline. If you miss the deadlines, you could potentially jeopardize your ability to make a claim.

The court may decide to waive some of these provisions, but you should protect your interests by complying with the above until you exhaust administrative remedies, i.e. filing the above appeals.

The attorney, Brian Hufford, believes that there is a high likelihood that we will receive a settlement. Because his fees are on a contingency basis, he will be highly motivated to achieve a settlement.

Insurance reimbursement of facility fees

Several members have said that insurance companies have stated that the they will attempt to recover facility fees which they “incorrectly” paid by offsetting future payments, either to the facility or to your professional practice. A Federal court in Texas ( Cigna v Humble) found that an insurance company may not reduce future payments to a health care provider, in this case a hospital, because they believed that they overpaid the entity. There is a class action lawsuit filed in New Jersey and also in Minnesota against United Healthcare regarding this. United also has said that they will recover the payments by reducing payment for the professional part of the practice. Assuming that the OBS part of the practice is a separate legal entity, they may not do so and you should consult your attorney regarding this.

If you are an in-network provider, you should consult with your attorney regarding billing for facility fees. Ultimately, your contract with the insurance company governs this. You should look to see if there is any prohibition against billing a facility fee, and also whether there are any limitations regarding billing an out of network facility fee, assuming that your OBS portion of the practice is out of network.

Insurance company requests for refunds

Several OBS facilities have had refund (recoupment) requests from insurance companies for facility fees. You may wish to send them a letter or have your patient send them a letter stating that you are aware that they pay for some OBS facilities with the same accreditation status as you, e.g. Mt. Sinai Surgical Associates ( aka Mt. Sinai School of Medicine, Mt. Sinai Department of Surgery, Mt. Sinai Ambulatory Surgery).   MSSA is located in the faculty practice building at 5 East 98th St. It is not part of Mt. Sinai hospital and is not a certified Article 28 ambulatory surgery center. Even so, MSSA is listed on the insurance company websites as an in network ambulatory surgery center. Anyone can operate there.  You do not have to be a Mt. Sinai staff physician.  You do not have to be an in-network physician.

The facility fee which is paid to MSSA is not an ” enhanced fee” similar to what is paid to in-network physicians as a small add-on to the professional fee.  The fee paid to MSSA is often similar to the ASC fee, which is much greater.

If you check the DOH website listing all accredited OBS facilities, you will find MSSA listed there.  Legally, an Article 28 facility cannot be located at the same place as an OBS.

If the insurance company has a statement in their contract that they do not pay for an OBS facility fee, but they pay it for one entity, they cannot state that they do not pay a facility fee for OBS, which is the usual statement.  If a patient is paying for out of network benefits, and the insurance company pays for an in network facility fee, like MSSA, it is difficult for them to justify not paying for an OBS facility fee for an out of network facility.

You can also look up the NPI number for the above entities and you will find that it is different than that for Mt. Sinai Hospital.

If your letter is not successful in having them rescind their refund request, please send us an email at and we will send you the name of an attorney who has been successful in having them rescind their request.

If the insurance company attempts to offset the recoupment by failing to pay for a subsequent facility fee, either to you or to your patient, please let us know immediately.  The courts do not look favorably on this and we have an attorney who is interested in pursuing this further.

How to have OBS fees paid

We have identified a billing company and an attorney who are able to have insurance companies pay for facility fees for OBS.  If you are a member of NYOBS, we will contact you.  Those members who are current in their dues and have been members for the longest time will be contacted first.  Be patient.  These companies can only handle a limited number of new clients at a time.

Be Careful about billing

It has come to our attention that there are some billing companies using UB-04 forms to bill insurance companies for a office based surgery facility fee and are misrepresenting OBS facilities as being Ambulatory Surgery Centers under Article 28 of the Public Health Law.

There are two critical entries on the UB-04 form: Field 4 “Type of Bill” and Field 42 “Revenue Code”. Under the Public Health law, you may not use the term “clinic” or “center” to describe an OBS facility:

It shall be prima facie evidence that a diagnostic or treatment center is being operated when any provider of medical or health services describes itself to the public as a “center, “clinic” or by any name other than the name of one or more of the practitioners providing these services

An incorrect entry under either one of those fields may cause that representation and make the insurance company believe that your are an Article 28 facility.  Please make sure that you are completely aware of how your billing company is representing you.  We suggest that you ascertain exactly how your billing company is representing your services.

Insurance billing and contracts:

As we have previously indicated, a benefit of your membership in NYOBS is that you have access to our team of professionals.  With that being said, although NYOBS does not endorse any individual or entity, we would like to introduce our members to our billing consultants. Many of our members have utilized the services of Kerrin Antommarchi of  Express Medical Billing, who is a corporate member of NYOBS.  Our members have found them to be very informative with respect to billing for facility fees.   They have been successful with obtaining reimbursement for facility fees for our members for several insurance companies, including Blue Cross, Cigna, many of the smaller carriers and occasionally others.  You may reach Kerrin at (201)653-3203 This information  is purposely only available on this website so that we can limit the distribution of information to members only.

Please note that although you may be able to presently secure payment for facility fees in some circumstances, there is a chance that the carrier will ask for these funds back in the future.  As such, we recommend that you address with your biller how your practice can also protect itself from possible claims by the carrier of deceptive or fraudulent billing through, but not limited to, such measures as an open disclosure, upfront, that you are an OBS Facility and not an Article 28 Facility.  As you can see, this is an ongoing and unfolding struggle – for which we continue to educate and advocate- and for which, we need your support and membership.


If you would like to set up a contract with Multiplan for your OBS facility which represents many insurance companies, please call  800 950-7040.

Please tell them that you were referred by The Society of New York Office Based Surgery Facilities.  Because of the nature of NYOBS, we cannot endorse any organizations, we can only refer them to you.

What does the state of New York have to say about paying facility fees for obs facilities?

In their FAQ, the Department of Health says the following:

43. Does accreditation status result in the ability of an office-based surgical practice (OBS practice) to receive a “facility fee”?
Accreditation status alone does not require a third party insurer to pay a facility fee. Whether a third party insurer will pay a facility fee is a matter of negotiation between the insurer and the OBS practice. Neither Medicaid nor Medicare will pay a separate facility fee for OBS.

Since the original law did not address payment for office based surgery, the department of health has stated that they will not opine further about payment for a facility fee.

At this point, Medicare and Medicaid do not pay for an OBS facility fee, however they are federal programs, not insurance. This is an issue we will address.

Interestingly, even though most insurance companies say they do not pay for OBS facility fees, all of the major insurance companies selectively pay for some OBS facility fees.  It is no secret.  Those OBS facilities are listed on the insurance company websites.


There is a great deal of controversy over the definition of an “Ambulatory Surgery Center”.  Different insurance companies have different definitions, but New York State has an old definition, which follows.  You should read through this several times, but it would appear to state that OBS services are defined as not being performed in a doctor’s office,  but rather in an ambulatory surgery center.

10 NYCRR § 755.1 – Ambulatory surgery definition

An ambulatory surgery service is a service organized to provide those surgical procedures which need to be performed for safety reasons in an operating room on anesthetized patients requiring a stay of less than 24 hours’ duration. These procedures do not include those outpatient surgical procedures which can be performed safely in a private physician’s office or an outpatient treatment room. Ambulatory surgery services may be provided in a free-standing ambulatory surgery center or a hospital-based ambulatory surgery center. Hospital-based ambulatory surgery centers may be on-site or off-site, as described in section 405.20 of this Title. The provisions of this Part shall be applicable to free-standing ambulatory surgery centers and off-site hospital-based ambulatory surgery centers.

The DOH has opined in a telephone call that they would not object to the use of the term ASC by an OBS facility, but that is not in writing.

Special information for Brooklyn Facilities

State Senator Martin J. Golden (22nd District in Brooklyn) has taken an interest in supporting office based surgery and helping in our fight for reimbursement. He has been responsive and proactive when approached  about problems concerning reimbursement for OBS facilities in his district. He has offered to help with negotiations with insurance companies and his intervention has proven successful.

His district extends from Bay Ridge to Floyd Bennett Field. If you would like to look at a map, there is one at If your facility is located in his district or you have patients who live there, please contact Senator Golden and tell him you need his help.

I suggest that you contact Senator Golden’s office by a faxed letter and phone call.   In your letter you should also ask him  to support the OBS reimbursement measure we are proposing, otherwise OBS facilities will close without lack of reimbursement.

Please also consider contributing to our PAC so that we can support those politicians who share our views.

His contact information is:

Senator Martin J. Golden
7408 Fifth Ave.
Brooklyn NY 11209
phone: 718-238-6044
fax: 718-238-6170

You may be able to speak with Gerry Kassar, his Chief of Staff.


Page last modified on: May 9th, 2018