Full Breakdown
Hospital CEOs Defend Facility Fees Amid Congressional Hearing
4/29/2026, 4:42:35 AM
Hospital CEOs Testify on Facility Fees
On Tuesday, executives from HCA Healthcare, CommonSpirit Health, New York-Presbyterian and ECU Health testified before the House Ways and Means Committee, chaired by Rep. Jason Smith (R-MO). The hearing focused on “facility fees” charged by hospital-affiliated outpatient sites and whether they exceed fees at independent centers.
Context: Hospital Spending and Facility Fees
Hospitals comprised about one-third of U.S. health-care spending in 2024—approximately $1.6 trillion. A JAMA Health Forum study reported higher patient payments for identical visits when doctors belong to hospital systems or private-equity firms. Facility fees cover staff, equipment and space, not the clinical service itself.
Key Players
Testifying CEOs were Michael Waldrum (ECU Health) and leaders from HCA, CommonSpirit and New York-Presbyterian. Republican members included Rep. Jason Smith (chair), Rep. David Kustoff (R-TN) and Rep. Greg Steube (R-FL); Democrats were Rep. Lloyd Doggett (D-TX) and Rep. Richard Neal (D-MA).
Fee Disparities
A Tennessee surgical center billed $656 for a colonoscopy; a hospital outpatient facility charged $1,222—a 100 percent increase. Hospital spending of $1.6 trillion accounts for about 33 percent of U.S. health-care expenditures.
Official Positions
Hospital leaders said higher facility fees compensate for lower Medicare and Medicaid reimbursements, sicker patients and a statutory duty to serve all. They also asserted that hospital-affiliated sites provide higher quality care. Republicans questioned whether the fees were reasonable and noted the lack of a clinical distinction. Democrats said the hearing deflected from recent Medicaid cuts in the prior administration’s domestic policy bill.
Opposition and Criticism
Rep. Kustoff highlighted the colonoscopy fee gap, asking if a 100 percent increase “seems reasonable.” Rep. Steube challenged facility fees when care quality appears identical. Rep. Doggett called the session a “deflection hearing,” saying the focus on pricing distracts from broader Medicaid policy impacts.
Gaps in Evidence
The CEOs’ cost justifications rely on internal assessments; no independent analysis of actual cost differentials for comparable outpatient services was presented. Consequently, the record lacks data confirming that hospital-affiliated sites incur higher operational expenses that would justify the quoted fees.
Verbatim Quotes
- “The American people are fed up with outrageous prices that seem artificially high,” — Rep. Jason Smith, R-MO
- “Is an 100% increase in the fee that you charge versus the surgical center, does that seem reasonable to you?” — Rep. David Kustoff, R-TN
- “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?” — Rep. Greg Steube, R-FL
- “We’re the only participants in the healthcare value chain that have that obligation,” — Michael Waldrum, CEO, ECU Health
Outlook
Committee leaders indicated that future hearings will examine the impact of facility fees on Medicare and Medicaid budgets, and legislators are expected to propose reforms aimed at greater price transparency for outpatient services.
