Hospital CEOs defend charging patients more at facilities

Hospital CEOs came under fire at a House hearing Tuesday, with Republicans accusing them of overcharging patients and exploiting the system.

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Executives from HCA Healthcare, CommonSpirit Health, New York-Presbyterian and ECU Health testified before the House Ways and Means Committee, defending their pricing practices — including that they should be able to charge higher prices for the same services compared with what patients might pay at independent practices.

Hospitals accounted for nearly one-third of U.S. healthcare spending in 2024 or about $1.6 trillion, according to a report in the journal Health Affairs. Another study, published in JAMA Health Forum, found that patients tend to pay more for the same doctor’s visits when their doctor is part of a hospital or private equity firm.

“The American people are fed up with outrageous prices that seem artificially high,” said Rep. Jason Smith, R-Mo., the committee’s chair.

Throughout the hearing, Republicans cited instances of hospitals in their states charging high prices at outpatient facilities affiliated with the hospital. These prices are often inflated by so-called facility fees, which are not related to the care provided but instead help cover expenses like staff and equipment.

Rep. David Kustoff, R-Tenn., pointed to an example of an independent ambulatory surgical center in his state that charged a facility fee of $656 for a colonoscopy, while an unnamed hospital outpatient facility charged a $1,222 facility fee.

“Is an 100% increase in the fee that you charge versus the surgical center, does that seem reasonable to you?” Kustoff asked the executives.

Rep. Greg Steube, R-Fla., said patients in his state are charged significantly more at hospital-owned outpatient clinics than at clinics owned and operated by physicians.

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“How can you justify facility fees on outpatient facilities when there is no meaningful difference in the care delivered or the quality of the care?” Steube said.

The hospital CEOs pushed back, saying the higher fees are because hospitals are often reimbursed below the cost of providing the care, particularly by government programs like Medicare and Medicaid.

They also said the higher prices reflect the higher quality of their care, the cost of treating sicker patients and a federal requirement for hospitals to care for all patients, regardless of their ability to pay. Privately owned clinics and facilities can generally have the right to choose what patients they see and can demand payment up front.

“We’re the only participants in the healthcare value chain that have that obligation,” said Michael Waldrum, the CEO of North Carolina-based hospital system ECU Health. “Doctors, nurses, insurance companies, drug companies do not.”

Democrats were far more muted in their criticism of the pricing practices of the CEOs who appeared before the committee, accusing Republicans of using the hearing as a distraction from the impact of Medicaid cuts, which Republicans passed as part of President Donald Trump’s sweeping domestic policy bill last year.

“This is more a deflection hearing than a hospital hearing,” Rep. Lloyd Doggett, D-Texas, said.

Rep. Richard Neal, D-Mass., the committee’s ranking member, said Republicans “keep trying to convince people that it’s about just the providers,” adding that “it’s about many of their policies as well.”