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In the US, How are hospitals paid for stroke? How does DRG work for stroke? What are the DRGs for stroke, and how much do they pay? How much profit does a hospital make per stroke?
Greetings! I understand that you are looking for information related to Diagnosis Related Groups (DRGs) for stroke, and the reimbursements/profit to hospitals for the care of these patients. It will be my pleasure to research this for you. The short answer is that reimbursements to hospitals can range from as little as $4,007 to over $15,000 depending on the hospital, exact diagnosis, and the presence of complications/comorbidities; however, these reimbursements are insufficient to cover the costs incurred by hospitals to treat these patients. A deep dive of my findings can be found below.
METHODOLOGY
In order to research this request, I began by searching for the DRG codes for stroke utilized by the US Centers for Medicare and Medicaid Services (CMS). Following this, I examined data from the CMS fiscal year 2017 final rule for the prospective payment system. A Google sheet was compiled detailing the payments to hospitals for the various DRGs for stroke. Medicare payments to hospitals were chosen as the basis for this research due to the availability of public data on costs and payments. Private health plans do not publicly post their reimbursement rates, as these vary from hospital to hospital. Further data on the cost of stroke treatment was sought in the peer reviewed journal "Stroke".
DRGs FOR STROKE
There are many diagnosis codes that fall under the six DRGs defined by CMS for strokes. These different conditions and descriptions of the stroke (by location/causation) are defined by ICD-10 codes listed here. DRGs are further divided based on the presence of major complications/comorbidities (MCC) or complications/comorbidities (CC). A listing of MCCs and CCs can be found here. The presence of these conditions can significantly impact the amount of reimbursement that acute care hospitals receive for treating patients.
The DRGs for stroke are:
DETERMINING PAYMENTS FOR DRGs
DRGs are reimbursed by CMS under the prospective payment system (PPS). This system pays acute care hospitals a lump sum for the care of patients based upon their diagnosis, regardless of length of stay. Each DRG receives a "weight" from Medicare based upon the average resources that hospitals utilize to treat these patients. This weight is then multiplied by the labor related and non-labor related share price that is determined geographically. For fiscal year 2017, the combined labor and non-labor value for hospitals that have achieved meaningful use measures for electronic health records is $5,516.14. This represents the highest level of reimbursement. For hospitals that did not submit quality data to CMS and also have not met EHR meaningful use standards, the rate is $5,369.62. This represents the lowest rate of reimbursement. To determine the amount of reimbursement, the weight for the DRG is multiplied by these dollar amounts. I have compiled this data into the attached Google sheet.
REIMBURSEMENT VERSUS COSTS
Cost data reveals that bundled payments by CMS for the treatment of acute stroke are insufficient to cover hospital costs. A 2011 study published in "Stroke" reveals the following median cost data (these were based on average costs in 2008):
->$14,102 for patients with good outcomes
->$18,856 for patients with severe disability
->$19,129 for patients with in hospital mortality
Utilizing the inflation calculator offered by the Bureau of Labor and Statistics, we can estimate 2016 values to be:
->$15,720
->$21,019
->$21,324
Please note that the above inflation corrected values do not account for the fact that the the price for the clot busting drug, tissue plasminogen activator (TPA) has increased by 111% from 2005 to 2014. Thus, these values may be an underestimate of treatment costs.
When comparing these values to those calculated to reflect the CMS bundled payments, we see that hospitals are not making a profit on stroke care. This presents a concern that hospitals may drop their designations as "stroke treatment centers" due to lack of profitability.
CONCLUSION
To wrap it up, hospitals see reimbursements from Medicare in 2017 of anywhere from $4,000 to $15,000, but may incur costs as high as $21,000. This financial loss is concerning due to the worry that hospitals may drop their designations as stroke treatment centers.
Thank you for using Wonder! It is my sincere hope that this information has been helpful to you in understanding the market for stroke treatment in the United States. Please do not hesitate to contact us if we can be of any additional assistance.