Same DRG. Same market. Five times the price. The variation is real. Build your network around that reality.
Brian Cotter, MPA HSF
$14,529 to $68,996 in Chicago. Medicare IP Reimbursement of Sepsis. 4.7x spread. The variation is not noise.
Top 5 and bottom 5 IPPS hospitals in Chicago-Naperville-Evanston (CBSA 16984), MS-DRG 871 sepsis w/MCC, FY2026. Same wage index (1.0815) for all 10. Operating Base Payment is identical at $13,822. Everything above that floor is the supplemental stack.
TOP 5
- Stroger / Cook County: $68,996
- Provident / Cook County: $46,840
- Mount Sinai Chicago: $27,775
- University of Illinois Hospital: $26,572
- Rush University Medical Center: $24,012
BOTTOM 5
- Palos Community: $14,529
- Edward (Naperville): $14,795
- Endeavor Northwest Community: $14,863
- Mercy Health Crystal Lake: $14,897
- Elmhurst Memorial: $15,292
What drives the $54K spread:
- UCP. Stroger’s uncompensated care payment is $45,929 per case. Cook County treats a majority Medicaid and uninsured population. Palos’s UCP is $0.
- IME. Teaching dollars. U of I has 1.28 interns per bed. Rush 1.14. Suburban community hospitals have zero residency programs and earn $0 IME.
- DSH. Tracks the Medicaid + SSI mix. Stroger: 46% + 14% = $1,326. Palos: 12% + 2% = $0.
The supplemental stack is how CMS funds the hospitals that take patients no one else will. Stroger gets $45,929 of UCP because Stroger treats people other Chicago hospitals turn away. Safety net hospitals do the work the rest of the system would otherwise absorb. That funding keeps them open.
Three things follow if you design commercial networks.
🔹 Network design. Cutting safety net hospitals from your network lowers your per-case average. It does not lower cost in the market. The uncompensated care has to land somewhere. It usually lands in your commercial rates at every other hospital in town.
🔹 Reference rates. A flat “200% of Medicare” pays the same dollars at Stroger and Palos. Rarely the right answer. A defensible benchmark needs to know which hospital it is pricing.
🔹 Incentives. Quality bonuses and bundled payments built on a flat Medicare reference reward and penalize the wrong behaviors at hospitals whose real cost basis is double or triple that reference.
🔹 Every IPPS hospital. Every MS-DRG. Every component. FY2026. brightspotinsights.com.
Same DRG. Same market. Five times the price. The variation is real. Build your network around that reality.
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Glossary
CBSA — Core-Based Statistical Area (CMS market geography)
CMS — Centers for Medicare and Medicaid Services
DRG — Diagnosis-Related Group (MS-DRG)
DSH — Disproportionate Share Hospital adjustment
IME — Indirect Medical Education adjustment
IPPS — Inpatient Prospective Payment System
MCC — Major Complication or Comorbidity
SSI — Supplemental Security Income (DSH formula input)
UCP — Uncompensated Care Payment
Brian Cotter,
BrightSpotInsights.com
Source: BSI CMS IPPS Benchmark datasets, FY2026, MS-DRG 871.
