Newly Released Hospital Data Show Uptick in Billings for Common Procedures

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By Michael D. Williamson

June 1 — Hospitals' billings for several common hospital procedures increased at a modest rate between 2011 and 2013, data released by the CMS June 1 show.

Officials from national hospital trade associations questioned the data's usefulness, however, and said the Centers for Medicare & Medicaid Services didn't include all the costs hospitals incur to treat Medicare patients.

The data showed in general, hospitals' Medicare charges for several of the most common procedures increased “at a modest rate” between 2011 and 2013, the agency said in a June 1 fact sheet. For instance, charges for major joint replacements rose at a rate of 4.3 percent between 2011 to 2012, or from $50,116 to $52,249, and at a rate of 3.8 percent between 2012 and 2013, or from $52,249 to $54,239, the fact sheet said.

In 2013, the total allowed Medicare cost for hospital procedures to treat major joint replacements was $6.6 billion, the fact sheet said. With nearly 450,000 total discharges, major joint replacements continue to be the most frequently occurring discharge under Medicare Part A, according to the fact sheet. The second-highest category was septicemia, or severe sepsis, with a total allowed cost of nearly $5.6 billion.

Between 2011 and 2013, hospitals charged Medicare more for several other common procedures, including treatment for different types of heart failure conditions and kidney and urinary tract infections, the fact sheet said.

The Centers for Medicare & Medicaid Services released the Medicare data to increase transparency on hospital utilization, the fact sheet said. The June 1 release is the third annual release of Medicare inpatient and outpatient hospital utilization payment data, the agency said in a memorandum to congressional health staff.

The last time the CMS released such hospital billing information, covering 2012, was in June 2014.

The data also showed what different hospitals in all 50 states and the District of Columbia charge for similar services, the June 1 fact sheet said.

Payments, Costs 

Overall, the data aren't likely to have a large impact on hospitals, said Caroline Pearson, a senior vice president for the consultancy Avalere Health. “We have not seen a lot of dramatic uses of the data,” after the CMS released the information in prior years, she told Bloomberg BNA in a June 1 telephone interview.

Furthermore, the data have limitations, Pearson said. For instance, the data don't accurately capture what the Medicare program pays to hospitals. The data instead show what hospitals charge Medicare for certain procedures, and what's charged to Medicare may differ from what the program pays, she said.

Industry: Hospitals Are Underpaid 

The American Hospital Association (AHA) echoed Pearson's views.

“Medicare payments are not reflective of hospital costs,” Caroline Steinberg, the AHA's vice president of trends analysis, said in a June 1 e-mail to Bloomberg BNA. She also said Medicare payments are set by law, and government programs underpay and don’t cover the cost of care.

In 2013, underpayment by Medicare and Medicaid to U.S. hospitals was $51 billion, Steinberg said. On a per-dollar basis, that meant Medicare reimbursed 88 cents and Medicaid reimbursed 90 cents for every dollar hospitals spent caring for these patients, according to Steinberg.

Chip Kahn, president and chief executive officer of the Federation of American Hospitals, said the data, when taken in isolation, don't reveal very much about the market or hospitals.

“I think this has turned into an annual exercise in which CMS does its best to release what it has,” Kahn told Bloomberg BNA in a June 1 telephone interview.

Furthermore, the data aren’t likely to do much to inform consumers, nor do they provide clinicians or hospitals better information for decision making, he said.

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Brian Broderick at