HOSPITAL PRICING AND
ESCALATING POLITICAL HEAT 
 

U.S. House Member Tackles “Meaningless” and “Grossly Inflated” Hospital Charges 

Saying “hospital charges have become so grossly inflated above their private market rates so as to be meaningless,” Chairman Bill Thomas of the U.S. House Ways and Means Committee send an extremely harsh letter last week to the Secretary the U.S. Department of Health and Human Services Michael Leavitt calling on the Department’s Office of Inspector General to finally use its “authority to determine what constitutes an excessive level of charges submitted by a provider or supplier to the Medicare and Medicaid programs.” Thomas went on to write, “The OIG apparently chooses to sacrifice the interests of taxpayers over those who wish to keep real prices shrouded in order to gouge the public, employers and insurers.” March 10, 2006 

Influential U.S. Senator “Troubled” by Hospital Reaction

In another letter that was more polite but stern and sent to the embattled American Hospital Association, U.S. Senator Chuck Grassley, the powerful Chairman of the Senate Finance Committee, noted that his “request to the nonprofit hospital community went unanswered for months” in regards to pricing charges to the uninsured and related issues. The Senator bluntly suggested that the AHA “should take a more active and serious role in this discussion.” The Grassley letter sent last Wednesday goes on to say, “In light of then Health and Human Services Secretary Tommy Thompson [2004] letter to the AHA, I am troubled by some of the ten hospitals to whom I wrote last year still claiming that Medicare regulations still prohibit them from providing discounts to the uninsured.” In February of 2004, Thompson rebuked the AHA in a letter stating clearly and unequivocally, “Nothing in the Medicare program rules or regulations prohibit such discounts.” March 8, 2006

Bush Administration Calls Hospital Behavior “Indefensible”

According to The Hill, Al Hubbard, Chairman of President Bush’s National Economic Council in a heated exchange with top leaders in the hospital sector bluntly told the audience “I can’t understand how you can look at yourself in the mirror and say, ‘I should not provide pricing and quality information to prospective customers. We don’t consider anything in our society without considering price. That’s the American way.” A hospital executive explained to Hubbard that “it would be difficult for me as a hospital, for a consumer to just call me” to get that information. According to The Hill, Hubbard seized on that remark. “You are absolutely right,” he said twice. “It is absolutely impossible for a consumer to call you to get the price, and that is indefensible, absolutely indefensible.” March 7, 2006