Major Joint Replacement Tops the List of Medicare Hospital Utilization Costs

    Newly released data show the hospital utilization costs were nearly $7 million for patients with Medicare Part A insurance who underwent major joint replacement in 2013.

    Major joint replacement continues to be Medicare’s largest expenditure for inpatient hospital stays, according to 2013 data released by the Centers for Medicare and Medicaid Services (CMS).

    Diagnosis Related Group (DRG) code 470, major joint replacement or reattachment of lower extremity w/o MCC, was associated with 446,148 total discharges, for a total reimbursement of $6,600,563,136 in 2013 (Table 1).

    Table 1.  Top Ten Medicare Diagnostic Related Groups by Discharges, FY2013

    This is the third year for the CMS has released the hospital utilization data. It also released data on physician and supplier utilization for the second year.

    CMS used inpatient data from the Medicare Providers Analysis and Review (MedPAR) dataset for fiscal year 2013 to produce the new data. The MedPAR dataset contains Medicare inpatient hospital claims for all Medicare beneficiaries enrolled in Medicare Part A who were treated at more than 3,000 hospitals in all 50 states and the District of Columbia.

    The top 100 inpatient stays represented in the hospital inpatient data are associated with approximately $62 billion in Medicare payments and over 7 million hospital discharges.

    With 3 years of hospital utilization data, CMS can now conduct trending analyses of charges, payments, and utilization. The chart below (Figure 1) shows the 3-year trend in average hospital charges per discharge for several of the top Medicare Severity Diagnosis Related Groups (MS-DRG) based on total discharges.  

    In general, charges increased over time at a modest rate. For example, major joint replacement grew from $50,116 to $52,249, or a rate of 4.3%, from 2011 to 2012, and grew from $52,249 to $54,239, a rate of 3.8%, from 2012 to 2013.  

    Figure 1. Trend in Medicare Average Hospital Charges for Top Discharges, FY2013

    Using the address of the hospital facility, CMS can also show trend analyses by geography. The map of the U.S. below (Figure 2) shows the 2013 hospital discharge rate per capita for major joint replacement by Hospital Referral Region (HRR).

    This analysis demonstrates geographic variation around the national average of 12.2 discharges per 1,000 beneficiaries. The highest discharge rates for this procedure were found in in the Midwest and Rocky Mountain areas. The lowest discharge rates per 1,000 were seen in the parts of the northeast, New Mexico, and parts of California and Nevada.

    Figure 2. Medicare Hospital Discharges per Capita for Major Joint Replacement by Hospital Referral Region, FY2013

    A second map of the U.S. (Figure 3) shows the compound annual growth rate in per capita discharges for major joint replacement by HRR over the period of 2011 to 2013.

    This analysis demonstrates that changes in discharge for major joint replacement, in general, grew fastest in parts of the upper Midwest and decreased in the south central region.

    Figure 3. Hospital Compound Annual Growth Rate in Discharges per Capita for Major Joint Replacement by Hospital Referral Region, 2011 to 2013

    According to CMS, the released data serve as a rich resource for examining Parts A and B costs, services, and trends. “These data releases will give patients, researchers, and providers continued access to information to transform the health care delivery system,” said acting CMS Administrator Andy Slavitt. “It’s important for consumers, their providers, researchers and other stakeholders to understand the delivery of care and spending under the Medicare program.”

    “Data transparency facilitates a vibrant health data ecosystem, promotes innovation, and leads to better informed and more engaged health care consumers,” said Niall Brennan, CMS chief data officer and director of the Office of Enterprise and Data Analytics. “CMS will continue to release the hospital and physician data on an annual basis so we can enable smarter decision making about care that is delivered in the health care system.”

    CMS noted there are limitations to the data released to the public – chiefly that they may not be representative of a hospital’s entire population. The data include information for Medicare beneficiaries with Part A fee-for-service coverage only, but hospitals typically treat many other patients who do not have that form of coverage. In addition, the data are limited to only the top 100 DRGs and thus do not necessarily include all Medicare discharges from a given hospital.