What Hospitals Charge for the Same Procedure (2024)

What this data actually is

Every year the Centers for Medicare & Medicaid Services publishes what each hospital billed Medicare for inpatient stays, grouped by MS-DRG — the diagnosis-related group, the code that sorts a hospitalization (a bout of sepsis, a heart-failure admission, a hip replacement) into a single payment bucket. The file is called Medicare Inpatient Hospitals — by Provider and Service, and it holds one row for every hospital × DRG combination: how many Medicare patients were discharged, the hospital’s average covered charge (its list price), the average total payment, and the average Medicare payment. The 2024 release is 145,879 of those rows, covering 2,906 hospitals and 540 DRGs across 4,952,481 inpatient stays.

One distinction governs every number on this page. A covered chargeis the hospital’s sticker price — the amount it lists on a bill before anyone negotiates. It is not what Medicare pays (a fixed DRG rate), not what a private insurer pays (a negotiated rate), and not what most patients pay. The charge is a billing artifact, and the gap between it and the real payment is the first thing the data shows. Every figure here is an average reported by CMS at the hospital level; the underlying file contains no patient-level records.

Hospitals charge about 5.03× what they are paid

Weighted across all 4,952,481 Medicare inpatient stays in 2024, the average covered charge was $92,408, while the average total payment — what Medicare and the patient actually paid the hospital together — was $18,360, of which Medicare itself paid $15,166. That is a charge-to-payment ratio of about 5.03 to 1. The list price, in other words, is roughly five times the bill that gets settled — and because Medicare pays a fixed rate per DRG, the size of the charge has almost no bearing on what the program pays.

That makes the charge a poor guide to cost but a revealing window into hospital pricing behavior. The rest of this study holds the procedure constant — same DRG, same broad clinical service — and asks a simpler question: for the identical category of care, how much does the list price move from one hospital, and one state, to the next?

The same procedure, wildly different charges

For each of eight common, high-search-demand DRGs, the table below shows the spread of hospital covered charges — the cheapest-charging hospital, the 10th percentile, the median, the 90th percentile, and the most expensive — alongside the discharge-weighted average charge and what was actually paid. Even setting aside the extremes, a typical high-charging hospital (90th percentile) bills roughly four times what a typical low-charging hospital (10th percentile) does for the very same DRG. At the tails, the gap reaches 58.7-fold.

What a joint replacement is “priced” at

The clearest case is the procedure people actually search for: a major hip or knee joint replacement (DRG 470). Across 1,212 hospitals in 2024, the median covered charge was $79,947 — but the list price ran from $19,194 at the lowest-charging hospital to $383,606 at the highest. The named examples below make the point concretely. Note the last column: the amount actually paid barely moves even as the charge swings 16.5-fold.

Geography multiplies the gap

Aggregate the same joint-replacement charges to the state level and a second layer of variation appears. NV hospitals averaged $187,520 in covered charges, while MD hospitals averaged $27,939 — a 6.7-fold difference for the same operation. MD sits at the bottom for every DRG in this study, and not by chance: it is the only U.S. state that runs an all-payer hospital rate-setting system, so its hospitals set charges close to what is actually paid. The pattern is geographic and structural, not a quality signal.

Why charges vary — and what this does not show

Hospital charges originate in the “chargemaster,” an internal master price list that few patients ever see and that reflects billing strategy more than the cost of care. Researchers have long linked higher charges to market concentration, for-profit ownership, and the absence of state price regulation; the consistent appearance of Maryland at the floor of every DRG here is the rate-setting effect in plain view. But this analysis is descriptive. It documents how much list prices differ across hospitals and states for the same DRG; it does not establish why any one hospital sets the charge it does, and a high charge is not evidence of worse — or better — care. Any link between a hospital’s charge and its quality, costs, or patient mix is correlational and outside the scope of this file.

Methodology & reproducible SQL

Every figure is a direct aggregation over the inpatient_utilization_summarytable — the operational projection of the CMS Medicare Inpatient Hospitals “by Provider and Service” 2024 public-use file (145,879 hospital-by-DRG rows; RLS Pattern B, public read) — joined to hospital_directory on the CMS certification number (CCN) for state and hospital name. The counts are pre-computed in three Postgres materialized views (a headline overview, a per-DRG distribution, and a DRG-by-state view); the page reads those bounded views and falls back to a committed snapshot of the same figures when they have not yet been applied. Method version hospital-charges-by-drg/v1. The headline numbers reproduce with:

-- Headline: charges vs payments, discharge-weighted across the whole file
SELECT
  count(*)                                                         AS rows,
  count(distinct ccn)                                             AS hospitals,
  count(distinct ms_drg_code)                                     AS drgs,
  sum(total_discharges)                                           AS discharges,
  round(sum(avg_covered_charges * total_discharges)
        / sum(total_discharges))                                  AS mean_covered_charge,
  round(sum(avg_total_payments  * total_discharges)
        / sum(total_discharges))                                  AS mean_total_payment,
  round((sum(avg_covered_charges * total_discharges)
        / sum(total_discharges))
      / (sum(avg_total_payments  * total_discharges)
        / sum(total_discharges)), 2)                              AS charge_to_payment_ratio
FROM inpatient_utilization_summary;

-- Cross-hospital charge distribution for one DRG (here a joint replacement)
SELECT
  min(avg_covered_charges)                                              AS min_charge,
  percentile_cont(0.10) WITHIN GROUP (ORDER BY avg_covered_charges)     AS p10,
  percentile_cont(0.50) WITHIN GROUP (ORDER BY avg_covered_charges)     AS median,
  percentile_cont(0.90) WITHIN GROUP (ORDER BY avg_covered_charges)     AS p90,
  max(avg_covered_charges)                                             AS max_charge
FROM inpatient_utilization_summary
WHERE ms_drg_code = '470';

-- Charge by state for one DRG (states with >= 5 reporting hospitals)
SELECT d.state,
  count(*)                                                            AS hospitals,
  round(sum(i.avg_covered_charges * i.total_discharges)
        / sum(i.total_discharges))                                    AS mean_charge
FROM inpatient_utilization_summary i
JOIN hospital_directory d ON d.ccn = i.ccn
WHERE i.ms_drg_code = '470'
GROUP BY d.state
HAVING count(*) >= 5
ORDER BY mean_charge DESC;

A few decisions shape the counts. Charges are the hospital-level as asserted by CMS; file-wide and per-DRG averages are discharge-weighted, while the cross-hospital spread (min, p10, median, p90, max) treats each hospital as one observation so the variation is not dominated by the largest providers. State is derived through the CCN-to-state join in , and state averages are limited to states with at least five reporting hospitals. Named facility examples use a 22-discharge floor for stability. Read how every Fonteum figure is sourced on the .

Limitations

• Correlational, not causal. This study describes how charges differ across hospitals and states; it does not explain why, and charge levels are not a measure of care quality, efficiency, or patient outcomes.
• Medicare fee-for-service only, one year. The file covers traditional Medicare Part A inpatient stays for 2024; it excludes Medicare Advantage, Medicaid, and commercial payers, and reflects a single data year.
• Hospital-level averages, with suppression. CMS publishes a per-hospital average per DRG, not individual bills, and suppresses hospital-DRG cells with fewer than 11 discharges — so very low-volume combinations are absent and within-hospital variation is hidden.
• DRG is a category, not a single operation. A DRG groups clinically similar stays; case mix within a DRG differs across hospitals, which explains part — but, given the 20-fold spread, far from all — of the charge variation.
• State coverage. 2,906 hospitals join to a state via CCN; a handful of facilities without a directory match are excluded from the state-level tables only.

Frequently asked questions

Related research

• Hospital price transparency enforcement — the federal rule meant to make these prices public, and how often it is broken.
• The hospital margin gap — operating margins for 6,000+ hospitals from CMS cost reports.
• Hospital-acquired condition penalties — where the program docks 1% of Medicare payments for safety failures.
• Sources & methodology index.

Sources

1. U.S. Centers for Medicare & Medicaid Services — Medicare Inpatient Hospitals, by Provider and Service (data year 2024). data.cms.gov
2. CMS — Medicare Inpatient Hospitals methodology and data dictionary. methodology (PDF)
3. CMS — MS-DRG classifications and the Inpatient Prospective Payment System (IPPS). cms.gov · Acute Inpatient PPS

Fonteum Research · Published 2026-06-12 · Reviewed by Jennifer Montecillo, MD, medical reviewer. Non-practicing medical reviewer. · Data source: CMS, public domain under 17 U.S.C. §105 · Published free under CC BY 4.0 · Method hospital-charges-by-drg/v1.