Large Variance Seen in Medicare Payments for Gastrointestinal Bleeding

Abstract

Purpose: In May 2013, Centers for Medicare and Medicaid Services (CMS) released the hospital charge and payment data for top 100 Medicare Severity Diagnosis Related Groups (MS-DRG) for the first time. This study evaluates variability in covered charges submitted by hospitals and CMS payments for gastrointestinal hemorrhage. Methods: MS-DRG is an aggregate of similar diagnoses, procedures and services during a hospital stay with sub-classifications - Major Complication/Comorbidity (MCC), Complication/ Comorbidity (CC) and Without-Complication/Comorbidity (w/o CC/MCC) ranging from most severe cases to cases with no significant conditions affecting severity or resource utilization. We selected DRGs of all 3 severity types (DRG 377, DRG 378, DRG 379 respectively) for gastrointestinal hemorrhage for all Medicare discharges in the year 2011. Descriptive statistics were used to analyze variations in DRG payments, submitted charges, and volumes based on geographical region and hospital ownership.FigureResults: Data from 2,494 acute care facilities were included. The highest number of discharges were in Florida (FL), California (CA), Texas (TX), New York (NY), and Illinois (IL) and the lowest were in Alaska (AK), Wyoming (WY), Vermont (VT), Montana (MT), and Idaho (ID). 48,398 discharges were DRG 377 with mean hospital charge of $46,459, and average Medicare payment of $12,730. The highest average payment was in AK ($20,419) compared to lowest average payment in AR ($10,335). 138,678 discharges were classified as DRG 378 with average hospital charge of $26,058 and average payment of $7,084. The highest average payment was in AK ($10,988) compared to the lowest average payment in AL ($5,864). 33,393 discharges were classified as DRG 379, with the mean hospital charge of $18,975, and average payment of $5,031. Highest average payment was in AK ($8,045) and the lowest was in Kansas ($4,180). County by county variability is seen in the attached graphic. Proprietary hospitals were noted to have maximum average charge but lowest average payments across DRGs. Conclusion: Significant state, county and ownership based cost variations exist within all MS-DRGs for for gastrointestinal bleeding. Future studies should focus on determining the cause of these variations and determining cost of care for specific MS-DRGs. Disclosure - Maged Rizk: Investor: Innowaiting (Dawazu LLC).