MedPAC: Hospital inpatient and outpatient services

Published by MedPAC, March 2019.  

In 2017, the Medicare fee-for-service (FFS) program paid 4,700 hospitals $190 billion consisting of $119 billion for about 10 million Medicare inpatient admissions, $66 billion for about 200 million outpatient services, and $6 billion for uncompensated care provided to non-Medicare patients. On net, inpatient payments increased by $2.6 billion (2.2 percent) and outpatient payments increased by almost $4.9 billion (8.1 percent). Inpatient payments increased primarily due to a 1 percent increase in payment rates, a slight increase in discharges per capita, and an increase in case mix. Outpatient payments increased due to rapid growth in Part B drug spending, a continued shift in the site of service billing from physician offices to hospital outpatient departments, and an increase in outpatient payment rates. In contrast, payments for uncompensated care decreased by about $0.4 billion. Thus, on net, between 2016 and 2017, overall hospital spending increased $7 billion. Over this same period, hospital spending per FFS beneficiary rose 4.3 percent, increasing from $4,992 to $5,208.


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Source: Medicare Payment Advisory Commission. Hospital inpatient and outpatient services. Chapter 3 in Report to the Congress: Medicare Payment Policy. Washington, DC: MedPAC, March 2019