I am working on a web application that maps healthcare expenses by providers in a geographic area. Our prototype was previously using mocked data, and I am now trying to replace it with real data from the 2012 Medicare Provider Utilization data set.

Basically I feel like I have good data in front of me, but I'm not sure how to intelligently interpret it. Below are two (abbreviated) example lines, each of which corresponds with one provider's costs relating to one medical procedure.

avg_Medicare_allowed_amt    avg_submitted_chrg_amt    avg_Medicare_payment_amt
      220.4492           |        517.3611         |          176.3583
      112.8608           |        1181.0625        |          90.2879

The methodology PDF including more detailed variable descriptions is here, variable definitions starting under heading 5 on page 4.

Each number corresponds with a dollar amount. allowed_amt is the amount that Medicare expects to pay that provider for that procedure, submitted_chrg is the amount that a provider actually bills medicare, and payment_amt is how much medicare actually reimburses. I also have unique IDs for each provider and procedure, as well as general identifying and geographical data.

What I want from this data is to be able to make an informed estimate of how much cost is actually incurred by the patient. In a less confusing world, this would just be (avg submitted charge) - (amount reimbursed) with the leftovers being passed on to the patient, but the way I understand this, Medicare billing does not really work this way, and the amount billed to Medicare does not really directly relate with the amount that a provider expects to be paid.

Is there any way from this data that I could make an educated estimate about how much a patient could expect to pay for a given procedure?


For the benefit of the community here is a late answer. The average payment by the beneficiary (and third party payers) is:

average_Medicare_allowed_amt - avg_Medicare_payment_amt

From the PDF: average_Medicare_allowed_amt is the sum of the amount Medicare pays, the deductible and coinsurance amounts that the beneficiary is responsible for paying, and any amounts that a third party is responsible for paying.

It is customary in US health insurance billing to distinguish between submitted charges, that are largely detached from the actual allowed charges. The latter are split between the beneficiary and Medicare. So by subtracting what Medicare actually paid from the price it allowed you get what is left for the beneficiary (or third party payers, meaning other insurers that cover the beneficiary, like Medigap).

  • 1
    This was my eventual conclusion, but it was just conjecture / guesswork so I'm glad to hear it confirmed by you as sane. – UpQuark Jul 30 '15 at 16:44

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