Sepsis coding in Medicare has a compression problem. The share of discharges coded at the highest severity tier (MCC) fell from 4.91% in 2013 to 3.1% in 2023, even as the middle tier (CC, DRG 871) grew from 72.56% to 81.72% over the same period. The lowest tier shrank too, from 22.53% to 15.18%. Almost everything is migrating toward the middle, and the middle pays well.

That compression pattern is the backdrop for a more specific question: when you look at which hospitals and states are pushing the hardest toward high-severity coding, does ownership type leave a fingerprint?

The Middle Tier Absorbed Everything

The 2020 spike is the clearest anomaly in the decade-long trend. MCC-coded discharges jumped to 5.78% of all sepsis cases that year, almost certainly reflecting COVID-19 patients coded as sepsis with major complications. By 2022, the MCC share had fallen back to 3.74%, and by 2023 it was at 3.1%, below even the pre-pandemic baseline.

What didn't reverse was the CC tier's dominance. At 81.72% of all sepsis discharges in 2023, DRG 871 now accounts for more than four in five sepsis cases billed to Medicare. The without-CC/MCC tier, which represented more than one in five discharges as recently as 2013, is now below 16%. For patients and taxpayers, this matters because DRG 871 pays substantially more than DRG 872. A decade of gradual migration into the middle tier represents a structural increase in Medicare's per-discharge cost for sepsis, independent of any change in actual patient acuity.

Alabama's 87.3% and What It Implies

Among the states with the highest share of sepsis discharges coded at high severity, Alabama leads at 87.3% in 2023. Kansas sits at the bottom of the listed states at 85.1%. That's a narrow two-percentage-point spread across states that vary considerably in demographics, hospital infrastructure, and ownership mix.

Alabama's average payment per high-severity discharge is $13,246, against a lower-severity average of $5,817 in the same state. That $7,400 gap per discharge, multiplied across 7,469 high-severity cases, is the financial incentive embedded in every coding decision. Nevada, with a similar high-severity share of 86.4%, generates $15,778 per discharge on average, reflecting higher regional wage indices rather than more aggressive coding.

New York's numbers are in a different category entirely. With 47,934 total sepsis discharges and an average payment of $21,009 per discharge, the state's total Medicare sepsis spend reached over $1 billion in 2023. That's partly a function of volume and partly a function of New York's cost structure. But at an 86.1% high-severity rate, New York is coding at nearly the same intensity as Alabama while collecting nearly $9,000 more per discharge.

Where Payments Grew Fastest

The hospital-level data tells a different story from the state averages. Parkland Health and Hospital System in Dallas, a public safety-net hospital, recorded the largest payment-per-discharge increase among tracked hospitals: from $18,849 in 2015 to $49,779 in 2023, a rise of $30,930 (164.1%). Legacy Good Samaritan Medical Center in Portland grew 104%, from $11,093 to $22,631 over the same period.

These are not for-profit hospitals gaming a reimbursement system. Parkland is a county hospital. Legacy Good Samaritan is a nonprofit. The hospitals showing the steepest payment growth in this dataset are predominantly public and nonprofit institutions, many of them safety-net providers serving high-acuity populations. That complicates any simple narrative about for-profit upcoding.

What the data does show is that payment-per-discharge growth for sepsis has been widespread and steep across ownership types. Whether the 164% increase at Parkland reflects a genuinely sicker patient mix over eight years, changes in documentation practices, or shifts in the underlying coding criteria is a question the numbers alone can't settle. But the pattern is consistent enough across institutions that the answer probably isn't unique to any single hospital or ownership model.