Improving Hospital Chargemaster Compliance and Revenue

By Kevin Smith | Posted: 06/30/2016

By Kevin Smith, Vice President, Product Management for Charge Integrity, nThrive

With so much pressure to cut costs and increase hospital revenue, healthcare professionals are looking for any and all opportunities to achieve savings and recapture dollars. One area of low-hanging fruit that can produce fast wins is verifying the integrity of your hospital chargemaster, otherwise known as the charge description master or CDM. If your chargemaster is incomplete or out-of-date, you could be bleeding money.

How do you know if you have a healthy chargemaster?

The process of verifying the integrity of your hospital's chargemaster begins with determining if everything you buy and use is entered and the pricing is up-to-date. Ensuring that codes are accurate and meet government regulations also is critical. If you don’t have a charge code for your supplies and services, you can’t charge for them, which translates to lost dollars. With so many regulatory changes to contend with, it isn’t hard to see how items can get missed and impact your revenue.

It also is important to know what is not chargeable. For instance, gowns and bed sheets aren’t chargeable and will result in a compliance violation if they slip into patient invoices.

How can you ensure that your chargemaster is compliant and complete?

In most cases it is incumbent on the internal staff to interpret new regulations and input new items. This labor intensive process requires enormous amounts of time and energy to conduct online searches and effectively navigate the Centers for Medicare and Medicaid Services (CMS) website. The better approach is to utilize technology and consulting services to help automate and improve CDM capture processes.

When choosing a service it is important to ask if their capabilities review 100 percent of chargemaster items, including inpatient observation and other soft code charges. This matters because, while there are approximately 15,000 lines in the Healthcare Common Procedure Coding System (HCPCS), which is authored by Medicare and the Blue Cross Blue Shield Association, this represent just 30 percent of items found in a typical chargemaster. The other 70 percent can represent a variety of line items that don’t have a Current Procedural Terminology (CPT) HCPCS code and, if these items aren’t set up properly, they could go unbilled.

How large is the lost chargemaster revenue?

While it varies among health care facilities, it can run into the millions. In one case, a health system approached us to resolve missing chargemaster items and ineffective charge capture. nThrive experts helped create a formal process to identify key roles and duties of the clinical and coding staff, which, once corrected, began returning an average of $500-600,000 in net revenue per quarter or approximately $2 million annually.

How can nThrive help?

Using our Charge Integrity Solutions we help organizations manage the messiness involved in keeping up with changing rules and regulations so money isn’t left on the table. We’re also vendor agnostic, working with EPIC and other leading electronic healthcare management (EHR) systems and integrating with most patient accounting systems. This makes it possible to work in one tool to eliminate dual entries. We also work with organization to improve processes and train staff on how to use our technology effectively.

For more information on how nThrive can help your organization stay on top of your CDM and bring more dollars through the door, call us today at 678.323.2500.