Improving Patient Care and Saving $1 Billion+ for Medicare
Pearl Health’s mission is to help primary care physicians perform in value-based care with actionable data, insights, and tooling to deliver more proactive, efficient care for their patients. We have purpose built the Pearl Platform to identify patients who might benefit from proactive outreach so PCPs can intervene to keep Medicare beneficiaries healthy. Sepsis is a leading cause of death in hospitals — at least 1.7 million U.S. adults develop sepsis each year, and at least 350,000 die as a result — and is a main driver of readmissions.1 We believe the prediction and prevention of sepsis presents a valuable opportunity in value-based care. Modernizing our regulatory approach to sepsis care and aligning Medicare policy with current clinical evidence will help improve care quality and outcomes, while potentially saving over $1 billion for Medicare.
Modernizing Medicare Sepsis Criteria:
A Call for Change
The Centers for Medicare & Medicaid Services (CMS) has long been at the forefront of driving quality healthcare delivery through evidence-based measures. However, its current sepsis criteria, particularly within the SEP-1 Core Measure, remain anchored to historical definitions that may be causing unintended consequences for patients, providers, and the healthcare system at large.2,3 This proposal outlines the compelling case for transitioning from current SEP-1 criteria to the more precise Sepsis-3 definition, with particular attention to the substantial financial implications for the Medicare program.
The Current Challenge
The existing SEP-1 measure relies heavily on Sepsis-2 criteria, which emphasizes Systemic Inflammatory Response Syndrome (SIRS) criteria and organ dysfunction parameters that we now know can be triggered by numerous non-septic conditions.4 The SEP-1 measure and Sepsis-2 criteria therefore have an overly broad definition of sepsis, which creates a cascade of clinical and financial implications: when patients with less severe infections meet SIRS criteria, they are often labeled as septic, leading to care escalation that may be unnecessary. This pattern drives up costs through increased intensity of services, longer hospital stays, and assignment to higher-weighted Diagnosis Related Groups (DRGs). This issue ultimately led to the development of the more modern clinical definition, termed Sepsis-3.5
Benefits to Patient Care, Provider Experience,
and Quality Measurement
The adoption of Sepsis-3 criteria would significantly enhance patient care quality. Research has demonstrated that patients with less severe infections often receive unnecessary aggressive interventions under current criteria, leading to increased exposure to broad-spectrum antibiotics and associated risk.6,7 More precise diagnosis would lead to more appropriate treatment intensity, reducing the risk of hospital-acquired complications from overly aggressive interventions.
For physicians and other healthcare providers, the transition to Sepsis-3 criteria would align regulatory requirements with current clinical understanding and practice. Providers have argued that the current disconnect between SEP-1 requirements and Sepsis-3 criteria creates significant cognitive burden for clinicians and may contribute to alert fatigue. The change would support more nuanced clinical decision-making and allow providers to focus more on patient care and less on meeting potentially outdated quality metrics.8
The shift to Sepsis-3 criteria would necessitate revising several quality metrics, but would ultimately result in more meaningful measures of care quality. Multiple validation studies have demonstrated the new criteria’s superior specificity in identifying patients at higher risk of mortality,9 which would lead to more accurate quality reporting and better assessment of hospital performance. The transition should follow established frameworks for implementing new quality measures in CMS programs.10 Previous successful transitions in CMS quality measures provide a template for this change.
Our Technology
Financial Impact Analysis
and we know that the SEP-1 Core Measure is driving overdiagnosis.”
Former Director of Analytics for a large ACO
and we know that the SEP-1 Core Measure is driving overdiagnosis.”
Former Director of Analytics for a large ACO
The financial implications of the current sepsis criteria are substantial. Medicare data indicates that approximately 1.7 million sepsis hospitalizations occur annually among beneficiaries, with an average cost of $18,600 per admission.11 The estimated annual Medicare sepsis spend exceeds $40B.12 Studies suggest that using the current SEP-1 criteria results in potential overdiagnosis rates of 20-30% compared to Sepsis-3 criteria.13,14
If we conservatively estimate that 20% of current sepsis diagnoses might be reclassified under Sepsis-3 criteria, this represents 340,000 hospitalizations annually. The difference in reimbursement between a sepsis DRG and a simple infection DRG averages approximately $4,000 per case.15 Ultimately, the proposal to reclassify diagnoses under the Sepsis-3 criteria could yield a potential annual savings of $1.36 billion for Medicare. These savings would come not from denying necessary care, but from more accurate classification and appropriate levels of intervention. Regular assessment of impact on patient outcomes, costs, and provider satisfaction would guide necessary adjustments to the implementation process.
Increasing Prevention with Improved Criteria
With potential annual savings of over $1 billion, improved patient outcomes, and better support for evidence-based clinical practice, the transition from SEP-1 to Sepsis-3 criteria would benefit all stakeholders in the healthcare system. The time has come to modernize our regulatory approach to sepsis care and align Medicare policy with current clinical evidence, ensuring that Medicare beneficiaries receive the most appropriate care while responsibly stewarding healthcare resources.
At Pearl Health, we’re helping primary care physicians and healthcare organizations drive better outcomes while lowering costs, and sepsis care is a major area of opportunity. Our technology leverages data science to surface actionable insights to PCPs, enabling more proactive intervention and preventive care.
The Pearl Plaform
Today, EHRs have early detection systems powered by machine learning models to warn providers of patients at risk of sepsis in the hospital setting. Pearl can play a similar role in the primary care setting — we’re updating our predictive Pearl Platform alerts aimed at preventing future admissions to identify patients whom providers should consider as potentially being most at risk for developing sepsis, enabling PCPs to intervene earlier. By combining better predictive analytics with proactive care coordination, providers will be better equipped to engage patients at risk of developing sepsis and change their trajectory of care for the better — resulting in improved outcomes and a lower total cost of care for Medicare.
- National Institute of General Medical Sciences, “Sepsis,” July 2024.
- CMS, “Sepsis Measure Information Form and Algorithm Overview,” February 28, 2022.
- Rhee C, Jones TM, Hamad Y, et al. “Prevalence, Underlying Causes, and Preventability of Sepsis-Associated Mortality in US Acute Care Hospitals.” JAMA Netw Open. 2019;2(2):e187571.
- Singer M, Deutschman CS, Seymour CW, et al. ”The Third International Consensus Definitions for Sepsis and Septic Shock (Sepsis-3)”. JAMA. 2016;315(8):801-810.
- Seymour CW, Liu VX, Iwashyna TJ, et al. “Assessment of Clinical Criteria for Sepsis: For the Third International Consensus Definitions for Sepsis and Septic Shock (Sepsis-3).” JAMA. 2016;315(8):762–774.
- Liu VX, Fielding-Singh V, Greene JD, et al. “The Timing of Early Antibiotics and Hospital Mortality in Sepsis.” Am J Respir Crit Care Med. 2017;196(7):856-863.
- Venczel K, Lesh N, Jouriles N, et al. “Beyond SEP-1 Compliance: Assessing the Impact of Antibiotic Overtreatment and Fluid Overload in Suspected Septic Patients.” J Emerg Med. 2024;66(2):74-82.
- Rhee C, Yu T, Wang R, et al. “Association Between Implementation of the Severe Sepsis and Septic Shock Early Management Bundle Performance Measure and Outcomes in Patients With Suspected Sepsis in US Hospitals.” JAMA Netw Open. 2021;4(12):e2138596.
- Shankar-Hari M, Phillips GS, Levy ML, et al. “Developing a New Definition and Assessing New Clinical Criteria for Septic Shock: For the Third International Consensus Definitions for Sepsis and Septic Shock (Sepsis-3).” JAMA. 2016;315(8):775–787.
- Centers for Medicare & Medicaid Services. Blueprint for the CMS Measures Management System Version 17.0, 2023.
- Centers for Medicare & Medicaid Services, Medicare Provider Analysis and Review (MEDPAR) Data, 2023.
- Buchman TG, Simpson SQ, Sciarretta KL, et al. “Sepsis Among Medicare Beneficiaries: 1. The Burdens of Sepsis, 2012-2018.” Crit Care Med. 2020;48(3):276-288.
- Rhee C, Dantes R, Epstein L, et al. “Incidence and Trends of Sepsis in US Hospitals Using Clinical vs Claims Data, 2009-2014.” JAMA. 2017;318(13):1241–1249.
- Rhee C, Chiotos K, Cosgrove SE, et al. “Infectious Diseases Society of America Position Paper: Recommended Revisions to the National Severe Sepsis and Septic Shock Early Management Bundle (SEP-1) Sepsis Quality Measure.” Clin Infect Dis. 2021;72(4):541-552.
- Medicare Payment Advisory Commission, “Report to the Congress: Medicare Payment Policy,” March 2023.
