Effective October 1, 1983, Medicare implemented a prospective payment system (PPS) for reimbursing inpatient hospital operating costs. This system replaced the existing retrospective cost reimbursement system whereby interim rates were paid on each bill and end of year adjustments were made based on information contained in hospital cost reports. Most hospitals are now paid a fixed amount, determined in advance, for the operating costs of each case according to one of approximately 500 Diagnosis Related Groups (DRGs). A discharge is assigned to a DRG based on diagnosis, surgery, patient age, discharge destination and sex. Each DRG has a weight established for it based primarily on Medicare billing and cost data. Each weight reflects the relative cost, across all hospitals, of treating cases classified in that DRG. The short stay hospital files include PPS exempt units (rehabilitation and psychiatric) and waiver state (Maryland) hospitals not paid under the PPS.
MEDPAR files contain information for 100% of Medicare beneficiaries using hospital inpatient services. Data is provided by state and then by DRG for all short stay and inpatient hospitals for fiscal years 2005-2007. The following fields are furnished: total charges, covered charges, Medicare reimbursement, total days, number of discharges and average total days. Data for PPS exempt hospitals and units has been grouped into DRGs for inclusion in these tables.
Please see tables by year in the Downloads area below.