OBJECTIVE To estimate medical costs associated with 17 major diabetes-related complications and treatment procedures among Medicare beneficiaries aged ≥65 years with type 2 diabetes. RESEARCH DESIGN AND METHODS Claims data from 100% of Medicare beneficiaries enrolled in fee-for-service plans from 2006 to 2017 were analyzed. Records with type 2 diabetes and complications were identified using ICD-9, ICD-10, and diagnosis-related group codes. The index year was the year when a person was first identified as having diabetes with an inpatient claim or an outpatient claim plus another inpatient/outpatient claim in the 2 years following the first claim in Medicare. Included individuals were followed from index years until death, discontinuation of plan coverage, or 31 December 2017. Fixed-effects regression was used to estimate the cost in years when the complication event occurred and in subsequent years. The total cost for each complication was calculated for 2017 by multiplying the complication prevalence by the cost estimate. All costs were standardized to 2017 U.S. dollars. RESULTS Our study included 10,982,900 beneficiaries with type 2 diabetes. Follow-up ranged from 3 to 10 years. The three costliest complications were kidney failure treated by transplant (occurring year $79,045, subsequent years $17,303), kidney failure treated by dialysis ($54,394, $38,670), and lower-extremity amputation ($38,982, $8,084). Congestive heart failure accounted for the largest share (18%) of total complication costs. CONCLUSIONS Costs associated with diabetes complications were substantial. Our cost estimates provide essential information needed for conducting economic evaluation of treatment and programs to prevent and delay diabetes complications in Medicare beneficiaries.
