Total Charges for All Hospitalized COVID-19 Patients May Reach Up to $1.4 Trillion, FAIR Health Study Finds

Estimated In-Network Amounts Are Expected to Reach Up to $558 Billion

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Mar 25, 2020, 10:00 ET

NEW YORK, March 25, 2020 /PRNewswire/ -- The total costs for all hospitalized COVID-19 patients may range from a low of $362 billion in charges and $139 billion in estimated in-network amounts to a high of $1.449 trillion in charges and $558 billion in estimated in-network amounts, depending on the incidence rate and severity of the infection in the US population. As reported in a FAIR Health brief released today, COVID-19: The Projected Economic Impact of the COVID-19 Pandemic on the US Healthcare System, this finding is based on FAIR Health projections, derived from estimates issued by public health experts, that from 66 million to 198 million Americans may become infected with the novel coronavirus that causes COVID-19, and that from 4.9 million to 19.8 million of them may require inpatient stays.

The Projected Economic Impact of the COVID-19 Pandemic on the US Healthcare System: A FAIR Health Brief, March 25, 2020

The total average charge per COVID-19 patient requiring an inpatient stay is estimated at $73,300 and the total average estimated in-network amount per commercially insured patient at $38,221.

A national, independent nonprofit organization dedicated to bringing transparency to healthcare costs and health insurance information, FAIR Health drew on its database of over 30 billion private healthcare claim records, and on estimates of Medicare and Medicaid costs, to project US costs for COVID-19 patients requiring inpatient stays. FAIR Health estimated the costs of COVID-19 medical care based on proxy codes used by providers. The findings stated above were based on inpatient ICD-10 procedure codes and revenue codes associated with influenza and pneumonia.

DRGs

As an alternative, FAIR Health also calculated US costs for hospitalized COVID-19 patients on the basis of diagnosis-related groups (DRGs) associated with pneumonia. On the basis of DRG, the per-patient average costs for hospitalized COVID-19 patients vary depending on severity as indicated by the DRG code, with DRG 193 for major complication or comorbidity, DRG 194 for complication or comorbidity and DRG 195 for no complication or comorbidity. The total average charges per patient range from $74,310 for DRG 193 to $42,486 for DRG 195. The total average estimated in-network amounts per commercially insured patient range from $38,755 for DRG 193 to $21,936 for DRG 195.

Total costs for all hospitalized COVID-19 patients vary on the basis of which DRG code is used. Assuming the highest projected numbers of infected patients needing inpatient stays, the costs range from $1.469 trillion in charges and $575 billion in estimated in-network amounts (for DRG 193) to $840 billion in charges and $329 billion in estimated in-network amounts (for DRG 195).

Telehealth

FAIR Health also examined telehealth codes commonly used for respiratory infections and their costs. Of the top 10 telehealth codes most often associated with all respiratory infections, the predominant one in 2019 was CPT^®1 99441 (physician/qualified healthcare professional telephone evaluation and management [E&M], 5-10 minutes), which accounted for 50 percent of all telehealth services for respiratory infections. The average charge for CPT 99441 is $43 and the average estimated in-network amount for those commercially insured is $34, making it the lowest-cost service of CPT codes that are used only for telehealth.

E&M codes billed both for telehealth and non-telehealth include 4 of the top 10 codes most often associated with respiratory infections. Among these codes, having telehealth as the place of service in most cases yields cost savings by comparison with all places of service for the same code.

FAIR Health President Robin Gelburd stated: "In this time of profound uncertainty and shared purpose, we hope that the information in this brief is useful to policy makers, payors, providers, researchers and other healthcare stakeholders, and to the country as a whole."

Marty Makary, MD, MPH, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health and a professor of surgery at the Johns Hopkins University School of Medicine, commented: "As we as a country mobilize every resource to fight COVID-19, people want to know how much it will cost. FAIR Health has helped put a price tag on medical services to care for these patients based on the best available projections using real-world data."

About FAIR Health

FAIR Health, a national, independent nonprofit organization that qualifies as a public charity under section 501(c)(3) of the tax code, is dedicated to bringing transparency to healthcare costs and health insurance information through data products, consumer resources and health systems research support. FAIR Health possesses the nation's largest collection of private healthcare claims data, which includes over 30 billion claim records contributed by payors and administrators who insure or process claims for private insurance plans covering more than 150 million individuals. FAIR Health licenses its privately billed data and data products—including benchmark modules, data visualizations, custom analytics and market indices—to commercial insurers and self-insurers, employers, providers, hospitals and healthcare systems, government agencies, researchers and others. Certified by the Centers for Medicare & Medicaid Services (CMS) as a national Qualified Entity, FAIR Health also receives data representing the experience of all individuals enrolled in traditional Medicare Parts A, B and D; FAIR Health houses data on Medicare Advantage enrollees in its private claims data repository. FAIR Health can produce insightful analytic reports and data products based on combined Medicare and commercial claims data for government, providers, payors and other authorized users. FAIR Health's systems for processing and storing protected health information have earned HITRUST CSF certification and achieved AICPA SOC 2 compliance by meeting the rigorous data security requirements of these standards. As a testament to the reliability and objectivity of FAIR Health data, the data have been incorporated in statutes and regulations around the country and designated as the official, neutral data source for a variety of state health programs, including workers' compensation and personal injury protection (PIP) programs. FAIR Health data serve as an official reference point in support of certain state balance billing laws that protect consumers against bills for surprise out-of-network and emergency services. FAIR Health also uses its database to power a free consumer website available in English and Spanish and an English/Spanish mobile app, which enable consumers to estimate and plan for their healthcare expenditures and offer a rich educational platform on health insurance. The website has been honored by the White House Summit on Smart Disclosure, the Agency for Healthcare Research and Quality (AHRQ), URAC, the eHealthcare Leadership Awards, appPicker, Employee Benefit News and Kiplinger's Personal Finance. FAIR Health also is named a top resource for patients in Dr. Marty Makary's book The Price We Pay: What Broke American Health Care—and How to Fix It and Elisabeth Rosenthal's book An American Sickness: How Healthcare Became Big Business and How You Can Take It Back. For more information on FAIR Health, visit fairhealth.org.

Contact:
Dean Sicoli
Chief Communications Officer
FAIR Health
646-664-1645
[email protected]

SOURCE FAIR Health