Shares of Ardent Health Inc. lost a third of their value Nov. 13 after the health system operator’s executives said rising professional fees and claims denials would help slash its 2025 net profits by half.
Speaking to analysts after Nashville-based Ardent reported its third-quarter results, President and CEO Marty Bonick said costs to bring in providers—most notably in anesthesia and radiology—have climbed faster this year than his team had expected. Professional fees were up 6 percent year over year in the first quarter—an improvement from last year’s 12 percent—but that pace accelerated in the spring to 9 percent and again in the three months that ended Sept. 30 to 11 percent.
That trend has moved Ardent’s leaders, who oversee 30 hospitals and 280 sites of care in six states, to respond beyond lowering their profit-growth forecast.
“We are renegotiating certain vendor contracts, particularly in anesthesia, to introduce more flexible cost structures that better align with patient volumes,” Bonick said on a conference call. “Additionally, given our increased scale, we are strategically replacing locums with more cost-efficient full-time hires. Collectively, these initiatives are strengthening the organization and will better position us for future earnings growth.”
Along with rising professional fees, healthcare providers have in recent quarters faced a growing number of claims denials from insurers, who argue that hospitals and clinics are being overly aggressive in their coding of procedures. Bonick said Ardent teams faced an unexpected Q3 uptick in denials after they had appeared to stabilize in the first of this year and that its outlook now “prudently assumes these industry headwinds observed in the third quarter will persist at elevated levels in the fourth quarter.”
Alongside the work underway to address professional fees, Ardent has created a group to address its insurance contracts and claims processes. In addition to those initiatives, Ardent executives recently laid off some employees and negotiated down an agency labor contract. Bonick said those moves will save the company more than $40 million on an annual basis.
