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March 25, 2020 02:40 PM

COVID-19 hospital charges may exceed $1.4 trillion

Maria Castellucci
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    The total charges to treat COVID-19 within hospital settings are projected to range from at least $362 billion to as high as $1.45 trillion, according to a new analysis.

    The findings, published Wednesday by not-for-profit Fair Health, are based on historical charges from influenza and pneumonia ICD-10 codes as well as estimates from public health experts regarding how much of the U.S. population is expected to be hospitalized from the virus.

    Influenza and pneumonia codes were used because the ICD-10 code for COVID-19 wasn't effective in the U.S. until March 18, said Robin Gelburd, president of Fair Health, in an email. Even so, the estimates are likely to be a good proxy for total charges because the treatment protocols for pneumonia and influenza are similar to COVID-19, she said. Fair Health has a database of over 30 billion private health insurance claims records it used for the report.

    Although hospital charges could total as much as $1.4 trillion, the actual amount reimbursed by health plans will be smaller because they negotiate rates. For instance, $1.4 trillion in hospital charges would actually be $558 billion in estimated in-network amounts from insurers, according to Fair Health's estimates using ICD-10 codes.

    Gelburd said Fair Health is hoping the estimates can help stakeholders such as hospital administrators and policy makers anticipate the financial impact from COVID-19.

    "The goal is to aid all key stakeholders in both short-term planning and planning for the duration of the crisis," she said.

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