Medicare vs. private payers: How rates differ for 10 hospital services

On average, private health insurers' payment rates are between 1.6 and 2.5 times higher than Medicare, according to a data brief from the Kaiser Family Foundation.

The brief examines hospital payments from private payers and Medicare for 10 inpatient services. Data is from the IBM MarketScan Commercial Claims and Encounters Database and public Medicare payment and utilization data for 2014-17. For each service, KFF compared average payments made by private health plans and Medicare.

Here is how payment rates differed between private payers and Medicare for 10 inpatient services. The dollar amounts are averages in 2017. 

Respiratory diagnoses related to COVID-19*

Respiratory with a ventilator for more than 96 hours (DRG 207)
Private payers: $100,461
Medicare: $40,218

Respiratory with a ventilator for up to 96 hours (DRG 208)
Private payers: $36,758
Medicare: $17,437

Respiratory infections (DRG 177)
Private payers: $33,786
Medicare: $13,297

*As the numbers are from 2017, the Medicare payment rates don't include the 20 percent add-on hospitals now get for treating COVID-19 patients. KFF said had this add-on been in effect in 2017, the difference would be smaller, but private payment rates would still be about double Medicare rates.

Common diagnoses

Angioplasty (DRG 247)
Private payers: $35,321
Medicare: $15,782

Bowel (DRG 330)
Private payers: $32,733
Medicare: $18,940

Knee and hip (DRG 470)
Private payers: $30,099
Medicare: $14,747

Bariatric (DRG 621)
Private payers: $22,179
Medicare: $11,531

Uterus (DRG 743)
Private payers: $14,444
Medicare: $9,232

Gastroenteritis (DRG 392)
Private payer: $11,055
Medicare: $5,872

Cellulitis (DRG 603)
Private payers: $10,980
Medicare: $6,511

View the full data brief here.

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