Mark Cuban’s exchange with Sara McGee, a hospital director running for the Texas legislature, started as a fight about Medicare rates and ended as a fight about transparency. Cuban wants a hospital to operate on cash-only Medicare reimbursement, publish every cost and dollar of revenue, and let the public see whether the math works. McGee’s strongest point wasn’t her opening shot calling Cuban disingenuous — it was her second one: it’s not the rates, it’s the uncovered care that breaks hospitals, and people without coverage delay treatment until it’s an expensive emergency. Cuban’s reply was the right one: then publish the uncovered-care numbers and let’s see. By the end, even McGee agreed — non-profits should be required to disclose down to the general ledger, since taxpayers already subsidize them.
That’s where the thread stops. But it’s also exactly where the existing regulatory framework should have started.
Every non-profit hospital already operates under Section 501(r) of the tax code, which requires a written Financial Assistance Policy — a sliding scale of discounts and free care tied to income, usually pegged to the Federal Poverty Level. In exchange for that promise, the hospital pays no federal income tax, no property tax in most states, and gets access to tax-exempt bond financing. The hospital also already files an annual Schedule H with the IRS reporting its charity care, Medicaid shortfall, and bad debt as aggregate dollar totals.
Here’s the problem: aggregate totals are exactly the wrong altitude. A single number for “charity care: $40 million” tells you nothing about whether that hospital actually applied its own sliding scale to the patients who qualified for it, what it would have cost to treat those same patients at Medicare rates, or how that $40 million compares to what the hospital saved in foregone taxes that year. Cuban’s GL-level disclosure idea is the right instinct aimed at the wrong target. We don’t need every journal entry. We need three numbers, separated and published per facility, per year:
First, true cost. What did it actually cost in materials, labor, and clinical expertise to deliver care — unbundled by facility fee and practitioner fee, not blended into one charge. Facility fees are where chargemaster abuse lives; practitioner fees are where the actual clinical labor cost sits. Mixing them is how hospitals currently obscure which side of the bill is inflated.
Second, Medicare-rate reimbursement. What would that same volume of care have been paid at Medicare rates, broken out the same way. This is the number that lets us measure the actual gap Cuban is asking about, instead of guessing at it from his side of the thread or McGee’s.
Third, financial assistance actually delivered. Not the bad-debt write-off, not a vague “community benefit” bucket — the dollar amount of care discounted or forgiven based on the “uncollected” Medicare reimbursements through the hospital’s own published 501(r) sliding scale, matched against how many patients in that income band the hospital’s own community health needs assessment says it should have served.
Put those three numbers next to each other, per hospital, and you get answers nobody currently has. You get how much fat is sitting in administrative overhead versus genuine unreimbursed clinical cost — McGee’s argument and Cuban’s argument, finally measured against the same ledger instead of argued past each other. You get a real number for how much commercial insurance is subsidizing Medicare and Medicaid shortfalls, instead of the industry’s preferred talking point that it simply is subsidizing them, asserted without a number attached. And you get something nobody is currently calculating at all: the ROI of financial assistance actually delivered, set against the tax revenue the public forgoes to let that hospital be non-profit in the first place. If a hospital’s FAP spend is a fraction of its tax exemption’s value, that’s not a hospital serving its community — it’s a tax shelter with a waiting room.
The only way to prove if cash-based, timely paid hospitals can work at Medicare rates is by forcing every non-profit hospital to show its work — facility fee separate from practitioner fee, true cost next to Medicare rate next to charity care actually delivered — and matching that against the tax bill they’re not paying. We won’t find out from a Twitter argument or an annual aggregated report filed once a year and forgotten. McGee said she’d support GL-level disclosure if it came by legislation rather than goodwill. Fine, if elected, pledge to sponsor the bill and make the sliding scale prove itself instead of just citing itself.
