DRG and Medicare Claims

Utilization and Volume

What procedures hospitals actually perform, how often, and at what cost — procedure by procedure, hospital by hospital.

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What is the DRG Dataset

Medicare inpatient claims, summarized by procedure and hospital.

The Medicare Inpatient Hospitals by Provider and Service dataset — commonly called the DRG dataset — is published annually by CMS and captures what hospitals billed to Medicare, what Medicare paid, and how many patients were treated, broken down by diagnosis-related group (DRG). Each row represents one hospital performing one procedure in one year.

The dataset covers over 500 DRG codes across thousands of hospitals. Combined with over a decade of annual releases, it builds a detailed picture of where procedures are concentrated, how prices vary across hospitals for identical diagnoses, and how inpatient volume has shifted over time.

What is a DRG

A diagnosis-related group is how Medicare pays hospitals.

Medicare does not pay hospitals based on what they charge or how long a patient stays. It pays a fixed amount per admission based on the patient's diagnosis and procedure — the DRG. Every inpatient Medicare claim is assigned one.

How it works
One code per admission, one fixed payment per code
When a Medicare patient is admitted to a hospital, CMS assigns a DRG based on the principal diagnosis, procedures performed, and patient characteristics like age and comorbidities. The hospital receives a predetermined payment for that DRG — regardless of actual cost. A hospital that treats the patient efficiently keeps the margin. One that runs over absorbs the loss.
What that means for the data
DRG volume is a direct measure of what a hospital actually does
The POS file says a hospital has a cardiac catheterization lab. The DRG dataset shows how many Medicare patients were actually treated there. Discharge counts by DRG are the most direct measure available of a hospital's actual procedural activity — not its stated capabilities, but its demonstrated volume.
Three Numbers Per Row

Every hospital-DRG pair carries the same three measurements.

Each record combines a volume count with two price points — what the hospital asked for, and what Medicare actually paid. The gap between those two numbers is where a significant portion of the analysis lives.

Volume
Total Discharges
The number of Medicare inpatient discharges for this DRG at this hospital in this year. The foundational count — how many times this procedure was performed for Medicare patients.
What was billed
Average Submitted Charge
The average gross charge the hospital submitted to Medicare per discharge. This is the list price — not what was paid. Submitted charges vary enormously across hospitals for identical DRGs and have limited relationship to actual cost.
What Medicare paid
Average Medicare Payment
The average amount Medicare actually paid the hospital per discharge after all adjustments — the DRG base rate modified by wage index, disproportionate share, teaching status, and outlier payments. This is the number that reflects real reimbursement.
The Payment Gap

What hospitals charge and what they receive are two different numbers.

The spread between submitted charges and Medicare payment is not noise — it's structure.

For any given DRG, a hospital might submit a charge of $85,000 and receive a Medicare payment of $18,000. That spread is not a mistake. Submitted charges are a hospital's internal list price — a number largely disconnected from actual cost or expected reimbursement. Medicare payment is determined by the DRG system and adjusted for hospital-specific factors. The gap between them varies widely across hospitals treating the same diagnosis, which makes charge-to-payment ratio a meaningful marker of pricing behavior rather than a simple billing artifact.

Average Submitted Charge
What the hospital billed
Internal list price. Varies widely for identical DRGs across hospitals. Not a reliable cost indicator.
Average Total Payment
All payer sources combined
Medicare payment plus any additional payments from other sources for the same admission.
Average Medicare Payment
What Medicare paid
The actual Medicare reimbursement after DRG rate adjustments. The most meaningful payment figure for comparison.
What the Data Enables

Volume and price together answer questions neither answers alone.

Discharge counts and payment data become most useful when combined — across hospitals for the same DRG, or across DRGs within a single hospital.

Procedure Concentration
Which hospitals perform a given procedure at high volume, and which perform it rarely? Volume concentration matters for complex procedures — outcomes for cardiac surgery and joint replacement are well-documented to correlate with procedure frequency.
Price Variation
For any single DRG, Medicare payments vary across hospitals based on local wage index, teaching status, and safety-net adjustments. That variation is visible and comparable — the same procedure at different hospitals, at different effective prices.
Hospital Specialization
A hospital's DRG distribution reveals its clinical identity. A facility where cardiac and orthopedic DRGs dominate volume is a different institution than one where medical management DRGs lead — regardless of what the POS services inventory says.
Volume Trends Over Time
With data from 2013 through 2023, discharge counts can be trended by DRG and hospital. The 2020 COVID disruption is visible in the data as a sharp volume decline across most elective procedure codes — a natural baseline for understanding what recovery looked like by procedure type.
What Utilization and Volume Data Reveals

Three things claims data makes visible.

Activity
What does this hospital actually do?
DRG discharge counts show procedural activity at the hospital level — not what a facility is licensed to perform, but what it demonstrably performs for Medicare patients, at what volume, year after year.
Pricing
How does this hospital's reimbursement compare?
Medicare payments for the same DRG differ across hospitals based on factors like teaching status and geography. Those differences are in the data and are directly comparable — making procedure-level price benchmarking possible.
Trend
How has inpatient volume shifted over a decade?
Eleven years of data — 2013 through 2023 — capture the long-run shift from inpatient to outpatient care, the COVID disruption, and post-pandemic recovery, all visible at the hospital and procedure level.
About the Data

Medicare inpatient claims going back to 2013.

The dataset covers Medicare fee-for-service inpatient hospitalizations only. Medicare Advantage enrollees, Medicaid, and commercially insured patients are not included. For hospitals with high Medicare Advantage penetration, the dataset will undercount total inpatient volume — but the DRG mix and pricing patterns it reveals remain representative of the hospital's inpatient activity.

Rows with fewer than 11 discharges for a given hospital-DRG-year combination are suppressed by CMS for patient privacy, consistent with the suppression approach used across Medicare public datasets.

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023