Hospital Quality Initiative - Medicare Payment and Volume Information for Consumers

Overview

In March 2008, the Centers for Medicare & Medicaid Services (CMS) began posting information on Hospital Compare about selected inpatient hospital stays of Medicare patients. The new information shows how often Medicare patients were admitted to the hospital for these conditions (volume) and what Medicare pays for those services (payment). This information gives consumers even more insight into the quality of the health care that is available at their local hospitals and what Medicare pays for those services.

By visiting Care Compare on Medicare.gov, users will see how facilities are delivering care to their patients through survey results and quality measures as well as payment and volume information for individual hospitals, all of which can help them make informed choices when selecting a hospital.

Payment and Volume Information

The payment and volume information reflects inpatient hospital services provided by many hospitals to Medicare beneficiaries. CMS has posted this information for the public to see the cost to the Medicare program of treating beneficiaries with certain illnesses in their community. A better understanding of the cost of care leads to more informed decision making, one more way beneficiaries can help improve the longer term financial health of the Medicare program. Payment and volume information can provide users with a general overview of hospitals' experience with Medicare Severity Diagnosis Related Groups (MS-DRGs).

MS-DRGs are payment groups of patients who have similar clinical characteristics and similar costs. Each MS-DRG is associated with a fixed payment amount based on the average cost of patients in the group. MS-DRGs for which Medicare payment and volume data are available include common inpatient stays such as hospitalizations for heart failure and heart bypass surgery.

For individual hospitals, the median Medicare payment is published for each MS-DRG. The median payment refers to the midpoint of all payments to the hospital for a particular MS-DRG, that is, half the payments were lower and half the payments were higher than the median payment. The median hospital payments for the same MS-DRG can vary. A hospital can get a higher payment for any or all of the following reasons:

• It is classified as a teaching hospital.
• It treats a high percentage of low-income patients (called a disproportionate share hospital).
• It may treat unusually expensive cases (outlier payments).
• It pays its employees more compared to the national average because the hospital is in a high-cost area. Note: A hospital's Medicare payments are adjusted based on the wage rates paid by area hospitals based on their payroll records, contracts, and other wage related documentation.

The volume displayed is the number of Medicare patient discharges for the selected MS-DRGs.

Where applicable, the appropriate quality measures are displayed with each MS-DRG. However, there is not a direct relationship between the payment and volume information and the quality measure information. The quality measure information does not include the same cases associated with each MS-DRG.

It is important to remember that this information does not replace talking with the patient's provider nor should it serve as the only source of information when selecting a hospital.

More information about selecting a hospital can be found at www.medicare.gov.