Cost Analysis of Cellulitis Treatment for Medicare Patients

Abstract

Purpose: Cellulitis is one of the most common reasons for hospital admission in the United States, accounting for over two million emergency department visits and 650,000 hospital admissions every year. As many of these patients are Medicare beneficiaries given the demographics of cellulitis, we sought to investigate trends in Medicare spending on inpatient cellulitis. Methods: We analyzed all publicly available reports released by the Center for Medicare and Medicaid Services (CMS) for more than 3,000 hospitals that received Medicare payments from 2011 to 2015. The total number of discharges, total amount charged by hospitals, total payments, and total Medicare reimbursements were identified for cellulitis inpatient admissions. The average hospital charges, payments, Medicare reimbursements, and proportion of charges reimbursed by Medicare over these five years were calculated. Results were stratified according to cellulitis severity. Results: From 2011 to 2015, the number of cellulitis discharges decreased each year, from 158,608 in 2011 to 139,306 in 2015 (12.2% decrease). This decline was driven entirely by a 14.8% decrease in hospitalizations for cellulitis without major complications, as hospitalizations for cellulitis with major complications actually increased by 9.1%. Despite decreases in total cellulitis discharges, costs charged by hospitals for cellulitis care increased from $3.53 billion in 2011 to $3.70 billion in 2015 (4.8%), with average charge per cellulitis admission increasing from $22,249 to $26,534 (19.3%). However, total payments and Medicare reimbursements over this time period only increased from $6,405 to $7,096 (10.8%) and Medicare reimbursements per admission increased from $5,265 to $5,591 (6.2%). The primary driver of this relative decline in reimbursement has been a 2.6% decrease in Medicare payments for cellulitis with major complications. As a result, the proportion of hospital charges reimbursed by Medicare has fallen steadily. In 2011, 23.7% of charges for cellulitis admissions were paid by Medicare, compared to 21.1% in 2015. Conclusions: Using CMS data, we highlight recent trends in cellulitis admissions, hospital charges, and Medicare reimbursements, stratified by cellulitis complexity. These findings suggest that more cost-effective methods of taking care of patients with cellulitis are warranted, as total payments and Medicare reimbursements continue to decrease, identifying a potential role for dermatologists to enhance quality while decreasing costs.