Differences in Hospital Billing for Total Joint Arthroplasty Based on Hospital Profit Status

Background Regional variations in hospital billing for total joint arthroplasty (TJA) have been reported. It is not clear whether differences exist in hospital charges for TJA based on hospital profit status. Methods Data from the Centers for Medicare and Medicaid Services on Medicare Severity-Diagnosis Related Groups (MS-DRGs) 469 (TJA with comorbidity) and 470 (TJA without comorbidity) for fiscal year 2011 were analyzed. Differences in hospital charges and payments were investigated based on hospital profit status (nonprofit, government, and proprietary). Generalized estimating equations determined differences in charges and reimbursement between hospital types controlling for census region, MS-DRG, and number of discharges. Results Significant differences in billing between institutions existed with median average hospital charges for nonprofit, government, and proprietary institutions being $70,514.30, $73,540.99, and $113,203.77 (P < .0001), respectively, for DRG 469 and $45,363.95, $44,956.57, and $62,715.39 (P < .0001), respectively, for DRG 470. Median average Centers for Medicare and Medicaid Services payments for nonprofit, government, and proprietary institutions for DRG 469 were $22,334.34, $21,346.65, and $21,281.30 (P = .017), respectively, and $14,461.95, $14,466.04, and $13,733.62 (P < .0001), respectively, for DRG 470. Multivariate analyses indicate that nonprofit hospitals charge 5% more (P = .021) and receive 3% less (P = .011) reimbursement than government hospitals. Proprietary hospitals charge 34% more (P < .0001) and receive 7% less (P < .0001) reimbursement than government hospitals. Conclusion Significant differences in hospital charges based on institution profit status were found, with proprietary institutions charging significantly more than nonprofit and government institutions. However, proprietary institutions had the lowest median average reimbursement.