Inpatient Definitions and Methodology

All information in this report is taken from the Medicare Provider Analysis and Review (MedPAR) file which is updated annually by CMS based on the federal fiscal year.  The file includes billing data for 100% of all Medicare fee-for-service claims (IPPS claims) for discharges during the twelve months ending September 30.  The report is based on the most recent periods available and is consistent with CMS Data Release policies. Please note that MS-DRGs introduced in FY08 are not compatible with prior DRGs. Also please note that "Average Payment" for MS-DRGs is different than "Average Reimbursement" that was reported for DRGs.

• IPPS Cases - total number of IPPS claims for the Base MS-DRG. IPPS claims are Medicare fee-for-service inpatient claims paid under the Inpatient Prospective Payment System.
• ALOS - The Average Length of Stay is calculated as total patient days for the Base MS-DRG divided by its number of discharges.
• Average Charges - The Average Charge is calculated as total gross charges for the Base MS-DRG divided by its number of discharges. Gross charges are amounts billed by the hospitals but are not necessarily the amounts paid by Medicare or other payers.
• Average Payment - The Average Payment is the amount paid to the hospital for the Base MS-DRG. This amount does not include any capital pass-thru amount or organ acquisition amount. It includes payments by Medicare (i.e. base MS-DRG payment, outlier payment, disproportionate share adjustment (DSH), indirect medical expense adjustments (IME), adjustments for certain transfers, etc.) It also includes amounts paid by or on behalf of the patient (e.g. deductibles or coinsurance) and amounts paid by third party insurers. The average reported for a Base MS-DRG is the total payment divided by its number of discharges.
• Average Cost - Costs are calculated for each patient on the basis of ratios of costs to charges for routine services and ancillary areas. Click here for cost allocation methodology.  The average reported for a Base MS-DRG is total allocated cost divided by its number of discharges.