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September 7, 2017

The most common, costly Medicare inpatient discharge diagnoses, charted

Daily Briefing

CMS last week released data on fiscal year (FY) 2015 Medicare payments that show sepsis was Medicare's most common and costliest inpatient discharge that year.

About the data

The latest Inpatient Utilization and Payment Public Use File (Inpatient PUF) details inpatient discharges for fee-for-service Medicare beneficiaries for FY 2015. The Inpatient PUF covers utilization, total payment, Medicare payment, and hospital-specific charges for the more than 3,000 hospitals that participate in the Medicare Inpatient Prospective Payment System. The data encompass more than 7.4 million discharges and $78.2 billion in Medicare payments.

Review CMS’s Final Rule for the Inpatient Prospective Payment System in FY 2018

Former President Barack Obama's administration started releasing hospital inpatient and outpatient discharge data in 2013.

Rise in sepsis

Medicare spent more than $6.1 billion for 522,580 inpatient sepsis discharges in FY 2015, making it both the most common and the most costly inpatient discharge, the Inpatient PUF data shows. Modern Healthcare reports that this year was the first time since CMS started releasing payment data in 2013 that sepsis was the costliest condition.

According to Modern Healthcare, the number of Medicare sepsis cases increased by 82,761 from 2014 to 2015, while costs increased from $5.3 billion to $6 billion.

Major joint replacement costs down as cases rise

Meanwhile, the data show an increase in major joint replacement cases but a decrease in the corresponding Medicare inpatient costs. Previously, major joint replacements had been the most common inpatient discharge and the costliest to Medicare, according to Modern Healthcare.

Medicare paid nearly $5.6 billion for 465,229 inpatient major joint replacement procedures in FY 2015, according to the Inpatient PUF data.

According to Modern Healthcare, Medicare paid $6.6 billion for major joint replacements in 2013, which is about $1 billion more than it paid in 2014 and 2015.

Experts say the drop in payment for joint replacement payments correlate with efforts to improve care coordination and efficiency. However, the latest data predate CMS' Comprehensive Care for Joint Replacement model, which launched in April 2016. The Trump administration last month proposed scaling back significantly the number of regions that participate in the model

Variation in hospital charges

In addition, the new data show significant variation in how much hospitals charge for the same procedures. For instance, the highest-charging hospital priced major joint replacement at $235,132, while the lowest-charging hospital—not including low-volume hospitals—priced it at $16,687, according to Axios' "Vitals." The median amount that Medicare actually paid for major joint replacement, however, was much lower at $11,474.  

Debate over data's value

The Obama administration began releasing the data in part to bring attention to hospital pricing.

However, the American Hospital Association (AHA) in a statement challenged whether the data serve a productive role in highlighting health care costs. AHA in a statement said, "The complex and bewildering interplay among 'charges,' 'rates,' 'bills,' and 'payments' across dozens of payers, public and private, does not serve any stakeholder well, including hospitals" (Nather, "Vitals," Axios, 8/31; Castellucci, Modern Healthcare, 8/31; Castellucci, Modern Healthcare, 9/1; CMS Inpatient Charge Data, accessed 9/6).

Improve sepsis outcomes with Crimson

Sepsis continues to be a difficult diagnosis to identify and manage in a timely manner. Despite availability of evidence-based guidelines, sepsis claims a disproportionately high share of in-hospital deaths, ranging from 19% to 34%. It also takes its toll on hospital resource consumption.

Our infographic outlines process improvement steps and corresponding data points for performance monitoring—and how Crimson can help.

Download the Infographic

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