HERC: HERC Outpatient Average Cost Data
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HERC Outpatient Average Cost Data

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HERC Outpatient Average Cost Data are estimates of encounter level costs for VA outpatient care. 

To create HERC Average Cost data, we distribute aggregate-level VA costs to encounter-level VA utilization using non-VA relative value weights. We call this the "average cost" method because it assumes that all encounters with the same observed characteristics have the same average cost.

Data Overview

The HERC outpatient file estimates represent the hypothetical Medicare reimbursement average given the Current Procedure and Terminology Codes assigned to the VA visit. Estimates are adjusted so that the estimates tally to actual national VA expenditures for that type of care.

  • HERC Outpatient Average Cost data include estimates for 12 types of outpatient care
  • Data include
    • Facility cost estimates (local cost)
    • VA national average cost estimates Cost (national cost)
    • Hypothetical Medicare reimbursement (HERC value)

Data Availability

HERC Outpatient Average Cost data are available for FY98-FY23. The dataset is updated annually, with updated expected to occur approximately July 1st each year. 

Data are available on VINCI to VA research and operations data users. Researchers can request access to HERC data through DART (Data Access Request Tracker). Visit the VHA Data Portal to access DART and learn more about the data request process for both research and operations (http://vaww.vhadataportal.med.va.gov/Data-Sources/HERC-Cost-Data; VA intranet only).

Data location: Data are available in VINCI at VINCI_HERC and on the SAS Grid at /data/prod/HERC.

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Resources for Using the Data

Proc Contents for HERC Outpatient Average Cost Data
Cost Type FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Outpatient Costs X X X X X X X X X X

Interested in Proc Contents pre-FY13? Contact herc@va.gov. 

Guidebook: HERC's Outpatient Average Cost Dataset for VA Care 
(http://vaww.herc.research.va.gov/include/page.asp?id=guidebook-outpatient-ac, VA intranet only)

This guidebook provides a detailed description of the methods used to prepare the HERC Outpatient Average Cost Data estimates, a user's guide for working with the data, and the results of our validation of the HERC dataset.

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Limitations of HERC Average Cost Data

A limitation with this method is precision. Because all encounters that share the same characteristics receive the same average cost estimate, the HERC Average Cost data may not be ideal if a researcher needs very precise data, such as when comparing close substitutes that may share many of the same characteristics.

More information about choosing a cost data source is available in the Data FAQ: "Which Data Source Should I Use: HERC or MCA?

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Methods

Outpatient Visits

For outpatient care, we use the relative values of all Current Procedures and Terminology (CPT) codes assigned to the visit. We use the relative values from the Resource Based Relative Value System (RBRVS), which is used to reimburse providers for services provided to Medicare patients. We assign every VA visit to one of 12 different categories of outpatient care. For each category, we find a specific factor to convert the relative value to a VA cost estimate. We assume that the resources used to provide VA outpatient care are proportionate to the relative values assigned in the Medicare reimbursement.

Outpatient Prosthetics

HERC cost estimates are dependent on clinics accurately coding CPT codes. Because we’ve found variance in coding accuracy for prosthetics, we use MCA costs for Outpatient Prosthetics cost estimates.

Outpatient Pharmacy

HERC does not estimate the cost of outpatient pharmacy. We recommend using MCA data for that purpose.

Clinic Stop to HERC Category of Care Assignments*
Category
Number		 HERC Category
of Care Name		 Clinic Stop Number**
21 Outpatient Medicine 101-103, 110, 116, 130, 131, 139, 142-144, 149, 153, 158, 159, 182, 185-188, 231, 301-326, 329-333, 335-342, 344-346, 348-353, 356, 369-373, 391, 392, 394, 434, 436, 437, 439, 450-485, 511, 674, 683-686, 690-692, 694, 695, 706, 709, 710, 712
22 Outpatient Dialysis 602-604, 606-608, 611
23 Outpatient Ancillary Services 111, 117, 120, 122-125, 147, 160, 161, 163-169, 708, 711, 714, 999
24 Outpatient Rehabilitation 195-199, 201-211, 213, 214, 216-225, 228-230, 240, 241,  250, 438, 715
25 Outpatient Diagnostics Services 104-109, 115, 126-128, 145, 146, 148, 150-152, 154, 155, 212, 334, 701-705, 717, 718
27 Outpatient Prosthetics 417, 418, 423, 425, 449
28 Outpatient Surgery 327, 328, 401-416, 419-422, 424, 426-433, 435, 441, 486-489, 716
29 Outpatient Psychiatry 156, 157, 501, 502, 504-506, 509, 510, 512, 515, 516, 520-522, 524-540, 542, 546, 550-554, 557-559, 561-584, 589-592, 731
30 Outpatient Substance Abuse Treatment 507, 508, 513, 514, 517-519, 523, 543-545, 547, 548, 555, 556, 560, 586-588, 593-599, 707
31 Outpatient Dental 180, 181
32 Outpatient Adult Daycare 190, 191
33 Home Care 118, 119, 121, 170-179, 192, 215, 347, 354, 503, 670, 680-682, 725-730
91 Contract Extended Care 650-652, 654, 656
92 Other Contract Care 610, 640-643, 653, 655, 658, 669
99 Unassigned 712, 801, 802, 900, 998

*Please refer to HERC's Outpatient Average Cost Dataset for VA Care guidebook (Intranet only) for further information on this table.
**Clinic stops 290-297 are not included because they are observation codes.

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HERC Outpatient Person-Level Cost Data

The last HERC Outpatient Person-Level Cost Dataset was created in FY14. Data users interested in information about this dataset should contact herc@va.gov.

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Last updated: May 9, 2024