Tools for More Accurate Inpatient Cost Estimates with HCUP ...

EXECUTIVE SUMMARYBackgroundThe Agency for Healthcare Research and Quality (AHRQ) creates hospital-wide cost-to-chargeratios (CCR) for each hospital in the Healthcare Cost and Utilization Project (HCUP). Eachyear, the agency collects accounting data from the Centers for Medicare and Medicaid Services(CMS) and the American Hospital Association (AHA). There is a known problem with thehospital-wide CCR in that it does not account for variations among service departments in thehospital. In particular, we know that there is a higher markup (the inverse of CCR) for ancillaryservices as a whole than for routine bed-unit services.Previous studies examined 2003 and 2006 HCUP data for individual services and cost centersto develop cost estimates and adjustment factors (AFs) for each All Patient Refined-DiagnosisRelated Group (APR-DRG) and for each Clinical Classification Software (CCS) category. In thepresent study, we use 2009 data to develop a more extensive methodology. We create AFs foreach Medicare-Diagnosis Related Group (MS-DRG) and for each CCS category. It is intendedthat users of HCUP databases can multiply the ordinary hospital-wide CCR by the appropriateAF for the patient’s MS-DRG or CCS category to get a more accurate CCR and, hence, a moreaccurate cost estimate.MethodThe data sources for this study were: (1) all states in the HCUP State Inpatient Databases (SID)for 2009 where hospitals reported detailed charges, (2) standard accounting reports publiclyreleased by CMS cost data for fiscal year 2009, and (3) HCUP Crosswalk data for hospitals in2009. Thirty-four states were included in the analyses. Among them, 27 states used thestandard UB04 revenue codes for detailed charges and seven states had bucketed charges thatcould be mapped to CMS cost-center clusters. For the great majority of hospitals and cases,the sum of the detailed charges was within $300 of the reported total charges.For each hospital, 13 cost-center clusters were defined. The CCRs for the clusters werecalculated for services from the: routine bed unit, specialty care unit, sub-provider, nursery, sub-1