["Health Services Research, Volume 61, Issue 3, June 2026. ", "\nABSTRACT\n\nObjective\nTo assess the prevalence and financial impact of Sepsis‐3 concordant vs. Sepsis‐3 discordant sepsis hospitalizations in Traditional Medicare inpatient claims.\n\n\nStudy Design and Setting\nThis retrospective observational study used a 100% sample of Traditional Medicare inpatient claims from 2016 to 2022. The study population included acute care hospitals reimbursed under the Inpatient Prospective Payment System, excluding those in Maryland and U.S. territories.\n\n\nData Sources and Analytic Sample\nAll Medicare beneficiaries with hospitalizations for sepsis, identified by DRGs 870–872, who were continuously enrolled in Medicare Parts A and B. Hospitalizations were classified as Sepsis‐3 concordant vs. discordant based on the presence of diagnosis codes for acute organ dysfunction.\n\n\nPrincipal Findings\nAmong 4.2 million hospitalizations with a sepsis DRG from 2016–2022, 22.6% (95% CI: 22.3%, 22.9%) lacked a diagnosis code for acute organ dysfunction and were classified as Sepsis‐3 discordant. These hospitalizations were most commonly associated with alternative diagnoses of pneumonia (27.4% (95% CI: 27.2%, 27.7%)), urinary tract infection (27.4% (95% CI: 27.2%, 27.6%)), and skin or subcutaneous tissue infections (9.7% (95% CI: 9.5%, 9.8%)). Thirty‐day mortality was substantially lower among Sepsis‐3 discordant (7.7% (95% CI: 7.6%, 7.8%)) versus concordant (33.4% (95% CI: 33.1%, 33.6%)) sepsis hospitalizations, suggesting meaningful clinical differences among patients with Sepsis‐3 discordant sepsis diagnoses. Hospital payments for Sepsis‐3 discordant sepsis hospitalizations averaged $839 (95% CI: $679, $999) more per hospitalization than alternative simple infections, leading to an estimated $114 (95% CI: $92, $136) million higher annual payments to hospitals.\n\n\nConclusions\nNearly one in four inpatient sepsis hospitalizations in Traditional Medicare may be discordant with Sepsis‐3, leading to substantial increases in spending. CMS could mitigate this by aligning ICD‐10 coding guidelines with clinical definitions.\n\n"]