{
  "study": {
    "slug": "medicare-inpatient-drg-cost-reference-2026",
    "title": "DRG codes: Medicare inpatient payment and volume, 2024",
    "standfirst": "Across all 540 MS-DRGs in the 2024 Medicare inpatient file, hospitals were paid an average of $15,166 per stay against $92,408 in billed charges — a 6.1× gap. Sepsis (DRG 871) was the highest-volume code at 577,119 discharges; CAR T-cell therapy (DRG 018) the costliest at $434,771 per stay.",
    "desk": "financial-distress",
    "article_type": "Original Research",
    "published": "2026-06-14",
    "issue": 66,
    "doi": "10.5072/fonteum/medicare-inpatient-drg-cost-reference-2026",
    "url": "https://fonteum.com/research/medicare-inpatient-drg-cost-reference-2026",
    "methodology_version": "drg-reference/v1"
  },
  "data_as_of": "2026-06-11",
  "datasets": [
    {
      "slug": "cms-inpatient-utilization",
      "name": "CMS Medicare Inpatient Hospitals",
      "publisher": "CMS — Medicare Inpatient Hospitals, by Provider and Service",
      "upstream_url": null
    }
  ],
  "key_findings": [
    {
      "number": "540",
      "finding": "distinct MS-DRGs make up the 2024 Medicare inpatient reference, drawn from 2,906 hospitals and 4,952,481 discharges",
      "dataset": "cms-inpatient-utilization"
    },
    {
      "number": "$15,166",
      "finding": "discharge-weighted average Medicare payment per inpatient stay across all DRGs in 2024, against $92,408 in average billed charges",
      "dataset": "cms-inpatient-utilization"
    },
    {
      "number": "577,119",
      "finding": "discharges for the single highest-volume code — sepsis without prolonged ventilation, with MCC (DRG 871) — more than any other DRG",
      "dataset": "cms-inpatient-utilization"
    },
    {
      "number": "$434,771",
      "finding": "average Medicare payment for the costliest high-volume DRG, CAR T-cell immunotherapy (DRG 018) — 29× the all-DRG average stay",
      "dataset": "cms-inpatient-utilization"
    }
  ],
  "faqs": [
    {
      "q": "What is a DRG code?",
      "a": "A DRG — diagnosis-related group — is the unit Medicare pays hospitals by. Each inpatient stay is assigned one MS-DRG (Medicare Severity DRG) from its diagnoses and procedures, and Medicare pays a set rate for that group rather than itemizing the bill. There are 540 MS-DRGs with Medicare inpatient activity in the 2024 file."
    },
    {
      "q": "What is the average Medicare payment per inpatient stay?",
      "a": "$15,166 across all DRGs in 2024, discharge-weighted across 2,906 hospitals and 4,952,481 discharges. The figure varies enormously by DRG: a urinary-tract-infection stay (DRG 690) averages $5,986, while a CAR T-cell immunotherapy admission (DRG 018) averages $434,771."
    },
    {
      "q": "Which DRG has the most Medicare discharges?",
      "a": "DRG 871 — septicemia or severe sepsis without prolonged mechanical ventilation, with major complication — at 577,119 discharges in 2024, billed by 2,661 hospitals. It is the single most common Medicare inpatient DRG, ahead of heart failure (DRG 291) at 304,694 discharges."
    },
    {
      "q": "Why are hospital charges so much higher than Medicare payments?",
      "a": "Billed charges are list prices set by each hospital and rarely paid in full by anyone. Medicare pays its own administratively set DRG rate regardless of charges. Across all DRGs in 2024, average charges were $92,408 and the average Medicare payment was $15,166 — a 6.1× gap."
    },
    {
      "q": "Are these the prices a patient pays?",
      "a": "No. These are the amounts Medicare pays the hospital for the stay, plus the hospital's billed charges. A Medicare beneficiary's own cost is set separately by deductibles and coinsurance, not by the DRG payment shown here. The figures are facility-side reimbursement, not patient out-of-pocket cost."
    },
    {
      "q": "What program year does this reference cover?",
      "a": "Calendar year 2024, the most recent annual release of the CMS Medicare Inpatient Hospitals by Provider and Service public-use file, snapshotted 2026-06-11. The query resolves the latest available data_year at run time, so the reference advances automatically when CMS publishes the next annual file."
    },
    {
      "q": "Can I reproduce these figures?",
      "a": "Yes. Every number is a direct aggregation over the public inpatient_utilization_summary table, grouped by MS-DRG for the most recent program year. The exact SQL is published in the reproducibility block below; the page, the figures, and a re-run of the query all resolve to the same rows in the frozen 2026-06-11 snapshot."
    }
  ],
  "citation": {
    "apa": "Fonteum Research. (2026, June 14). DRG codes: Medicare inpatient payment and volume, 2024. Fonteum Research, Issue 66. https://doi.org/10.5072/fonteum/medicare-inpatient-drg-cost-reference-2026",
    "url": "https://fonteum.com/research/medicare-inpatient-drg-cost-reference-2026"
  },
  "reproducible_sql": "-- Medicare inpatient DRG cost-and-volume reference — fully reproducible query.\n--\n-- Question: across every MS-DRG that Medicare paid for inpatient care in the\n-- most recent program year, what did each code cost and how often was it billed?\n-- For each DRG: total discharges, average covered (billed) charges, average\n-- Medicare payment, and the number of distinct hospitals reporting it — ranked.\n--\n-- Source:\n--   public.inpatient_utilization_summary — CMS \"Medicare Inpatient Hospitals,\n--     by Provider and Service\" public-use file (MUP_IHP). One row per\n--     hospital (CCN) × MS-DRG × data_year. public, read-only.\n--     Snapshot 2026-06-11; program year 2024 (the most recent annual release).\n--     145,879 rows · 2,906 hospitals · 540 distinct MS-DRGs · 4,952,481 discharges.\n--     License: US-Government-Works (17 U.S.C. §105).\n--\n-- Grain note: CMS suppresses any hospital-DRG cell with fewer than 11\n-- discharges (total_discharges IS NULL). Those cells are excluded from\n-- discharge-weighted averages below — never imputed.\n--\n-- Averages are DISCHARGE-WEIGHTED across hospitals, not a mean-of-means: each\n-- hospital's per-stay figure is weighted by that hospital's discharge count, so\n-- a 5-discharge hospital does not count the same as a 5,000-discharge one. This\n-- reproduces the national per-stay average a payer would actually observe.\n--\n-- \"Most recent program year\" is resolved at query time, never hard-coded.\n\nWITH latest AS (\n  SELECT max(data_year) AS yr FROM public.inpatient_utilization_summary\n),\nbase AS (\n  SELECT *\n  FROM public.inpatient_utilization_summary\n  WHERE data_year = (SELECT yr FROM latest)\n    AND total_discharges IS NOT NULL          -- drop CMS-suppressed cells\n)\n\n-- ============================================================================\n-- (1) Headline overview for the most recent program year.\n-- ============================================================================\nSELECT\n  (SELECT yr FROM latest)                                       AS data_year,\n  count(*)                                                      AS hospital_drg_rows,\n  count(DISTINCT ccn)                                           AS hospitals,\n  count(DISTINCT ms_drg_code)                                   AS drgs,\n  sum(total_discharges)                                         AS total_discharges,\n  round(sum(avg_covered_charges   * total_discharges) / sum(total_discharges)) AS dw_avg_covered_charge,\n  round(sum(avg_medicare_payments * total_discharges) / sum(total_discharges)) AS dw_avg_medicare_payment,\n  round(sum(avg_total_payments    * total_discharges) / sum(total_discharges)) AS dw_avg_total_payment,\n  round(\n    sum(avg_covered_charges   * total_discharges)\n    / nullif(sum(avg_medicare_payments * total_discharges), 0), 2\n  )                                                             AS charge_to_medicare_multiple\nFROM base;\n--  data_year hospital_drg_rows hospitals drgs total_discharges dw_avg_covered_charge dw_avg_medicare_payment dw_avg_total_payment charge_to_medicare_multiple\n--  2024          145,879        2,906     540    4,952,481           92,408                 15,166                18,360                6.09\n\n-- ============================================================================\n-- (2) THE REFERENCE — per-DRG aggregates, ranked by discharge volume.\n--     This is the canonical table: every DRG present in the program year, with\n--     discharge volume, billed charges, Medicare payment, and provider count.\n--     Swap the ORDER BY to rank by cost (dw_avg_medicare_payment DESC) instead.\n-- ============================================================================\nSELECT\n  ms_drg_code,\n  max(ms_drg_description)                                       AS ms_drg_description,\n  count(DISTINCT ccn)                                           AS hospitals,\n  sum(total_discharges)                                         AS discharges,\n  round(sum(avg_covered_charges   * total_discharges) / sum(total_discharges)) AS avg_covered_charge,\n  round(sum(avg_medicare_payments * total_discharges) / sum(total_discharges)) AS avg_medicare_payment,\n  round(sum(avg_total_payments    * total_discharges) / sum(total_discharges)) AS avg_total_payment\nFROM base\nGROUP BY ms_drg_code\nORDER BY discharges DESC;                                       -- full set: 540 rows\n--  Highest-volume rows (top of the 540-row reference):\n--  ms_drg_code description                                          hospitals discharges avg_covered_charge avg_medicare_payment\n--  871 Septicemia/severe sepsis w/o MV >96 hrs, w/ MCC               2,661     577,119      90,381            15,524\n--  291 Heart failure and shock, w/ MCC                               2,587     304,694      56,495            10,022\n--  177 Respiratory infections and inflammations, w/ MCC             2,332     141,351      71,065            12,668\n--  193 Simple pneumonia and pleurisy, w/ MCC                        2,442     136,649      60,101             9,868\n--  872 Septicemia/severe sepsis w/o MV >96 hrs, w/o MCC             2,216     103,998      49,416             7,681\n--  690 Kidney and urinary tract infections, w/o MCC                 2,133      91,493      38,134             5,986\n\n-- ============================================================================\n-- (3) Same reference, ranked by cost (Medicare payment per stay), volume floor\n--     of 1,000 national discharges so the top is a stable reference, not a\n--     handful-of-cases artifact. 260 of the 540 DRGs clear the 1,000 floor.\n-- ============================================================================\nSELECT\n  ms_drg_code,\n  max(ms_drg_description)                                       AS ms_drg_description,\n  count(DISTINCT ccn)                                           AS hospitals,\n  sum(total_discharges)                                         AS discharges,\n  round(sum(avg_covered_charges   * total_discharges) / sum(total_discharges)) AS avg_covered_charge,\n  round(sum(avg_medicare_payments * total_discharges) / sum(total_discharges)) AS avg_medicare_payment\nFROM base\nGROUP BY ms_drg_code\nHAVING sum(total_discharges) >= 1000\nORDER BY avg_medicare_payment DESC\nLIMIT 10;\n--  ms_drg_code description                                          hospitals discharges avg_covered_charge avg_medicare_payment\n--  018 CAR T-cell and other immunotherapies                            49       1,360    2,187,781           434,771\n--  001 Heart transplant or implant of heart assist system, w/ MCC      87       1,814    1,604,490           295,327\n--  003 ECMO or tracheostomy w/ MV >96 hrs (except face/mouth/neck)     272       6,749    1,160,394           209,580\n--  004 Tracheostomy w/ MV >96 hrs, w/o major O.R. procedure            212       3,589      680,475           120,704\n--  005 Liver transplant w/ MCC or intestinal transplant                53       1,043      819,999           116,001\n\n-- ============================================================================\n-- (4) Distribution context: how many DRGs clear a meaningful volume floor, and\n--     the median provider count + median Medicare payment across all DRGs.\n-- ============================================================================\nWITH per_drg AS (\n  SELECT\n    ms_drg_code,\n    count(DISTINCT ccn)                                         AS hospitals,\n    sum(total_discharges)                                       AS discharges,\n    sum(avg_medicare_payments * total_discharges) / sum(total_discharges) AS avg_medicare_payment\n  FROM base\n  GROUP BY ms_drg_code\n)\nSELECT\n  count(*)                                                              AS drgs,\n  count(*) FILTER (WHERE discharges >= 1000)                            AS drgs_ge_1000_discharges,\n  round(percentile_cont(0.5) WITHIN GROUP (ORDER BY hospitals))         AS median_hospitals_per_drg,\n  round(percentile_cont(0.5) WITHIN GROUP (ORDER BY avg_medicare_payment))::int AS median_drg_medicare_payment\nFROM per_drg;\n--  drgs drgs_ge_1000_discharges median_hospitals_per_drg median_drg_medicare_payment\n--  540          260                      53                     15,170",
  "license": "U.S. Government Works (federal sources; 17 U.S.C. §105)",
  "generated_by": "Fonteum — https://fonteum.com",
  "notes": "Aggregate, source-traced figures frozen to the snapshot above. Reproduce by running reproducible_sql against the cited federal dataset; no per-entity records are included."
}