Patients that have similar clinical characteristics and similar costs are
assigned to an MS-DRG. The MS-DRG will be associated with a fixed payment
amount based on the average cost of patients in the group. Patients are
assigned to a MS-DRG based on diagnosis, surgical procedures, age and other
information. Medicare uses this information that is provided by hospitals on
their bill to decide how much they should be paid. Hospital Compare shows
information for each hospital on selected MS-DRGs for the current data collection period- Opens in a new window. If a MS-DRG has "Complications" or "Comorbidities" in its title,
it means the hospital may have treated more complicated patients.
Because MS-DRGs are highly technical, patients and other consumers may need to
work with a doctor or other healthcare provider to understand these terms as
well as the payment and volume information. ‘CC’ refers to complications or
comorbidities. MCC refers to major complications or comorbidities.
When Medicare pays a hospital based on the MS-DRG, it takes into account the
following (case mix):
- How bad the illness is or if the patient dies (severity of illness)
- How likely it is that the patient will get better or get worse (prognosis)
- What would happen if the patient does not receive immediate or continuing
care (need for intervention)
- How much and what type of service the hospital needed to provide, such as
lab work, X-rays or physical therapy (resource intensity)
The payment and volume information is for
acute care hospitals.- Opens in a new window
"Critical access hospitals (CAH)",- Opens in a new window
"Acute Care - VA Medical Center",- Opens in a new window
and
"Children's Hospitals- Opens in a new window
are not included because they are paid using another method.
Median Medicare payments for the same MS-DRG can vary. 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.
A hospital can get a higher payment for any or all of the following reasons:
- It is classified as a
teaching hospital- Opens in a new window
- It treats a high percentage of low-income patients (disproportionate share)
- 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 (wage index).
Note: The hospital's wage index is calculated using the hospital's payroll records, contracts and other wage related documentation
Hospital Compare lets you compare the hospitals you select with other hospitals
in your state and in the nation. The state and national amounts are shown as a range
of payments (between the 25th percentile and the 75th percentile). This is the range
of payments for the most typical cases treated for the MS-DRG. The information doesn't
include unusually low payments for cases, such as when a patient was transferred
to another facility before being fully treated. It also doesn't include unusually
high payments for cases that are more complex and costly to treat. Only one number
appears in this field when the 25th and 75th percentiles are the same.