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Deadly Infections Drive Billions in Hospital Bills to Medicare

Severe sepsis requiring mechanical ventilation is costliest diagnosis

Life-threatening complications from bacterial infections are on the rise among hospital patients, increasing at a double-digit rate as the population ages and costing U.S. health-care programs billions of dollars a year, according to a report from BloombergBusiness.

Septicemia or severe sepsis (diagnostic-related group [DRG] code 871) was the second most frequently billed diagnosis submitted by hospitals to Medicare in 2013, with 398,004 cases, according to data released June 1 by the Centers for Medicare & Medicaid Services. That’s 15% more than in 2012 and 24% higher than in 2011, according to a Bloomberg analysis of the Medicare payments.

The three sepsis-related codes included in the CMS data accounted for approximately $7.2 billion of Medicare payments to hospitals –– up 9.5% from the previous year.

Among individual hospitals, the largest number of cases billed came from Montefiore Medical Center in the Bronx, New York, with 941 discharges and an average charge of $98,877 Bloomberg says. Montefiore was followed by Memorial Hermann Hospital System in Houston, Texas, with 891 cases, and New York Hospital Medical Center of Queens, New York, with 857.

In general, however, charges increased over time at a modest rate. For example, major joint replacement (DRG 470) grew from $50,116 to $52,249 (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. Meanwhile, total payments for major joint replacements, the most commonly billed procedures, increased only 3.3%.

Every state had an increase in cases related to severe sepsis with major complications compared with the previous year, according to the CMS data. Montana and South Dakota were the top gainers, jumping more than 50% each.

Severe sepsis requiring mechanical ventilation was the costliest diagnosis in the Medicare data, which cover the 100 conditions most frequently billed by hospitals. The average charge nationwide was approximately $170,000 –– more than a hip or knee replacement or common cardiovascular procedures. Hospitals charged an average of $52,000 for severe sepsis without mechanical ventilation but with major complications.

Bloomberg calculated the total payments by Medicare using the discharges and average Medicare payment after beneficiary co-payments and deductibles provided in the released data.

Medicare payments to doctors were long kept from the public after medical associations argued in the early 1980s that their release would violate physicians’ privacy, the Bloomberg report says. In May 2013, a federal judge lifted a 33-year-old injunction on the data following a lawsuit by Dow Jones & Co. Last year, the Obama administration decided to make all payment information public.

Sources: BloombergBusiness; June 3, 2015; and CMS; June 1, 2015.


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