5 Good Habits of a Healthy Chargemaster

nThrive KnowledgeSource chargemaster technology

The hospital chargemaster or charge description master (CDM) is the heart of a healthy revenue cycle. It’s a database of all items used in patient care, including services, supplies, drugs, and their associated prices. The revenue generated from each line-item then flows into the healthcare system’s patient accounting system (PAS) and the patient is billed. With thousands of ongoing line-item updates, limited staff, and compliance issues coupled with price transparency requirements, maintaining a healthy chargemaster is labor intensive and time-consuming, but a key component to preventing revenue leakage.

In this article, we will review how your hospital or healthcare organization can:

  • Remain compliant even with ongoing regulatory changes
  • Identify areas of potential risk
  • Educate staff and develop a proactive plan to defend your CDM

How to maintain compliance within the CDM?

Regular maintenance of your chargemaster can be compared to a physical exam for your body. It’s necessary for several reasons but mostly to ensure that you have accurately captured CMS updates, new procedures, services, supplies or drugs. There should be an ongoing, documented process established to ensure that you remain compliant with Medicare, services are being accurately charged, and that you are receiving appropriate reimbursement. Often a chargemaster team is comprised of revenue integrity, billing, compliance, IT and HIM staff, responsible for process documentation, guidelines, and best practices.

How often should the CDM be reviewed and why?

At a minimum, the CDM should be reviewed quarterly to ensure that you capture all CMS or fiscal intermediary updates, new procedures, services, drugs and supplies, in addition to any pricing changes. Also, it’s important that each department “own their charges” and be responsible for conducting a monthly review. It might come as a surprise, but an estimated 60 percent of chargemaster items are either inaccurate or missing. With such large discrepancies, payor denials and compliance risk can become an issue.

What areas should be monitored within the CDM?

The team responsible for maintaining the chargemaster should follow the 3 Cs which are correct, complete, and compliant. Verify with your staff that they understand the descriptions, charges, and codes relevant to their department. Review charges versus reimbursement amounts and compare order entry and charge tickets. Monitor claims and/or perform chart reviews to check for compliance and reimbursement. Lastly, identify and routinely validate the need for duplicate charges, zero volume and zero-dollar charges across the enterprise and within departments.

How should CDM changes be communicated and staff educated?

Regular communication of all changes and/or updates to the appropriate department staff and physicians is imperative and will ensure a more accurate and efficient billing and revenue cycle. Updates can come from several resources such as CMS, Fiscal Intermediary bulletins and new services, procedures, supplies or drugs within the healthcare system itself.

To ensure that your CDM is consistently maintained, a reference tool and utilization of a CDM maintenance technology is highly recommended. An online reference tool such as nThrive KnowledgeSource® can quickly and easily provide current regulatory guidance for all areas within the revenue cycle continuum. With more staff working remotely, a web-based solution is a cost-effective way for your hospital or healthcare organization to ensure that everyone has the necessary access to the most current and compliant information.

How important is operational integration to the health of my CDM?

The CDM touches all three areas of the revenue cycle, so building a strong, integrated structure is imperative. Both departmental and operational managers can play a key role in helping the charging process by correcting coding problems at the source. Any rejections due to CPT/HCPCS errors should be directed to the appropriate ancillary department or to the HIM department to make certain the codes reflect the correct services and procedures performed. The business office should communicate departmental issues regarding repetitive claim denials. Additionally, ensure that all codes assigned by HIM or hard coded into the CDM are transferring properly to the claim and regularly update the chargemaster with any coding or billing changes.

The chargemaster is at the heart of a healthy revenue cycle, serving as an organizations’ starting point for billing patients and payors. nThrive’s chargemaster technology is a complete cloud-based platform that provides benchmark pricing for more than 400,000-line items. Our technology analyzes 100 percent of your CDM for compliance changes and makes recommendations for updates, which ultimately aids in the mitigation of inaccurate charging.

With constantly changing charge items and regulations, healthcare providers need an accurate and compliant source of truth that generates correct charges and defensible pricing. A well designed and maintained CDM can improve staff productivity, reduce claims and line-item denials, while minimizing reimbursement and audit risks. Say yes to a healthy chargemaster and contact our CDM experts today to take your hospital’s revenue cycle health to new heights.


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