JAMES CARTER And BRADY WALCZAK: A Medicare Transparency Makeover

Imagine this: you go for the same routine medical test at two clinics. One charges $100. The other, $300, because it’s owned by a hospital. Same nurse, same machine, same results. The only difference? A hospital logo on the sign out front.

If that sounds absurd, it is. But under Medicare’s outdated payment rules, it’s also perfectly legal. Only in Washington would we pay triple for identical care because of the name on the door.

America’s seniors—and taxpayers—are footing the bill. Medicare routinely pays hospitals two to three times more than independent clinics for the same outpatient procedures. That “hospital markup” is nothing short of a hidden subsidy, fueling a corporate buying spree as hospitals scoop up local physician practices just to bill Medicare at inflated rates.

It’s a classic shell game: consolidation masquerading as care. And the cost is enormous. Medicare’s own advisory body, MedPAC, determined three years ago that if all outpatient services had been paid at independent clinic rates, Medicare would have saved $6.6 billion annually, and seniors’ co-pays would have dropped by $1.7 billion. That’s not pocket change—it’s money that could be keeping premiums down and extending the life of Medicare’s trust fund.

So why hasn’t this been fixed? Two reasons: opacity and lobbying.

Hospital bills remain a masterclass in obfuscation—stuffed with cryptic “facility fees” and unexplained surcharges that show up long after the patient leaves. It’s like a restaurant adding a $75 “table ambiance fee” for sitting near the window. And while patients drown in paperwork, hospital lobbyists flood Capitol Hill with warnings that any payment reform will “threaten care.”