Is the Price Right?
By David Yeager
For The Record
Vol. 27 No. 6 P. 24
Don't let revenue escape by failing to keep abreast of what's going on in the charge description master.
Whether it's for cars, houses, or personal health, regular maintenance pays dividends. The same is true for charge description masters (CDMs), also called chargemasters. Between updates from the Centers for Medicare & Medicaid Services (CMS), coding changes, and price fluctuations within markets, staying on top of a CDM can be tricky.
There are many facets to maintaining an efficient CDM, including determining when it's not working to capacity. One sign that it may be due for an update is if it's causing extra work for the billing department. Elaine Dunn, MS, RRT, RPSGT, CPCO, vice president of clinical services delivery for Adreima, a revenue cycle service company, says an increase in manual billing adjustments could indicate the CDM needs a tune-up.
"If you start to see a significant amount of back-end work, specifically around your claim edits system, to where the billers are having to manually adjust or correct through that edit process, then it's likely that [the problem is] not being tracked back to the root [and] that it's [due to an] incorrect entry in the chargemaster," Dunn says.
Lori Marks, director of coding for Pyramid Healthcare Solutions, says looking at the CDM as a whole helps ensure that orders and charges are linked correctly. The goal is to make sure that the order master matches the chargemaster. Line items should match up.
"For example, if you have a radiology exam ordered, you want to make sure you have a charge associated with it," Marks says. "You want to make sure that the order and charge are correct so I would look at that to make sure that's being done correctly. It may or may not need a CPT code, or it may need a CPT modifier to make sure that it's regularly used."
Another sign that the CDM may not be up to par is if it's not generating the expected revenue. By reviewing internal and public data, a health care organization should have an idea of how much income it should be pulling in. If organizational estimates don't come close to actual revenue, it's probably a good idea to look at the CDM, says Mark Mancuso, director of revenue cycle management services for NextGen Healthcare, an HIT consulting company.
"If other [similar-sized] facilities within your geographic region are charging more for services, [it may be time to update your CDM]," Mancuso says. "Also, if the data reviewed are not reaching the maximum allowable within your current contractual relations with your payers, [you may want to do a CDM review]."
Find Out What You Don't Know
CDM inspections require both multiple steps and organizationwide input. To find the areas where it can be improved, a gap analysis must be performed. The first step is to compile relevant data.
Depending on the facility's size and scope, data are available from multiple sources, says Mancuso, who recommends organizations examine current financial information from the enterprise platform as well as internal and external sources specific to the facility's size and geographic location. He says charge increases should be based on these data, as well as the facility's contractual parameters with its payers.
Analyzing data, however, requires comparisons. Bre Meadows, a senior consultant and general manager of the revenue cycle practice for e4 Services, says a database and software tools can compare the necessary data from multiple sources. Although most organizations use commercial software tools to handle data comparison, there is another option.
"You actually can develop your own database if you have people who are savvy with Microsoft Access," Meadows says. "Medicare releases, on an annual basis, all of the information for billing codes that you would have in your CDM. You can look at those releases to figure out if you have any pricing deficiencies or any issues with the coding that you have in your CDM, but you do need to have some sort of tool to do the comparison."
Dunn recommends checking CPT and HCPCS codes against the active code list to make sure the data are up to date. In addition, she says it's important to determine whether the codes are being used appropriately. To do so, check the code descriptions in the CDM against how they're being deployed in clinical departments and ascertain whether they're being used in compliance with American Medical Association guidance.
Revenue codes must be associated with specific CPT codes, Dunn says. For example, a laboratory revenue code should be linked to a laboratory CPT code. Modifiers are another component to monitor. Dunn says anything that requires a modifier code must include an appropriate indicator such as a left or right bilateral modifier.
Additionally, she recommends paying special attention to pharmacy codes, noting that the units billed must match the CPT codes. "For example, the HCPCS code may be set to 10 milligrams, but you have a 100-milligram vial that you're giving to the patient. You need to reconcile that through your billing processes," Dunn says. "And that's usually a really big area of opportunity that we find when we're looking at chargemasters. [Many facilities] haven't reconciled those units so, essentially, [they are] only billing it out at 10 milligrams when [they are] actually dispensing 100 milligrams."
In general, it's good practice to analyze revenue and usage for signs of systemic issues, Dunn says. For example, low volume on a charge that's typically used frequently, such as a chest X-ray, may indicate that it's not identified correctly in the order entry system or not being used appropriately. Dunn recommends organizations compare pricing with the appropriate fee schedules to ensure competitive pricing and maximum reimbursement.
In addition to a detailed review of charges associated with medical devices, medications, and supplies, determine whether a charge is even being used, says Marks, noting that's not as easy as it sounds, especially considering some charges are used in only one department. Deactivate all charges no longer in use, she adds.
A Team Effort
Along with finding gaps in the CDM, preventing or minimizing new gaps is also a concern. Keeping the CDM running smoothly helps the entire organization, but understanding how to do so is rarely at the top of to-do lists—most departments focus on their piece of the puzzle. If there isn't a smooth charge capture process, this can create confusion.
"What you don't want, and where hospitals get into trouble, is either allowing departments to independently make changes or submit change requests directly to IT. Somebody who truly knows the chargemaster needs to review the pricing and coding that's being requested to make sure it's compliant and covering your costs," says Meadows.
To streamline the charge capture process, Meadows recommends staffing a compliance director or a CDM coordinator to review change requests. Large organizations may use a team approach for charge captures. While the team's size depends on the facility, Mancuso believes having a single gatekeeper prevents a lot of problems.
"[The size of the group] would depend on your enterprise system's ability and maintenance protocols," he says. "Ideally, a revenue integrity specialist who has reviewed the data would come up with a process to initiate changes and/or additions to the chargemaster to ensure effective and smooth implementation."
Balancing departmental needs with organizational goals can be difficult.
Nevertheless, maintaining the CDM is a team effort that includes educating clinical staff about how it works, says Marks, adding that clinical departments should be updated about any additions or deletions. Beyond that, they should have input into how the CDM is used.
"It's a good thing to have a CDM coordinator, but I think it takes the entire hospital [to keep it running well] so all of the departments should have a say in what goes into their chargemaster," Marks says. "Each department is slightly different, so if they're not using it, you wouldn't want to add it and if they're using it, you want to make sure that it's definitely there for them."
Dunn says ensuring the involvement of clinical departments is a critical but often overlooked step on the road to establishing a successful CDM effort. She notes that while care providers are in the best position to document, they may not be well versed in CPT coding concepts, Medicare reimbursement rules, and compliance issues. To help with the process, Dunn recommends CDM coordinators meet with department directors once or twice per year to review processes, discuss CDM usage patterns, and provide feedback about whether departmental practices align with the source guidance.
Reconciliation support should rank high on the priority list as well. Whoever interacts with the CDM coordinator—whether it's the department director or another staff member—must know what services, supplies, and pharmaceuticals are being used so charges can be properly assigned. Clinical staff need to understand what to charge and how the process affects the entire organization, says Meadows, adding that it's imperative to hold departments accountable for the reconciliation of charges on a daily basis.
Getting clinical departments on board with proper CDM procedures is only part of the process; physicians also need to buy in. The formation of accountable care organizations and the arrival of bundled payments will provide some incentive for physicians to become more involved in the charge process. However, Dunn says the most effective method to get them onboard is to use real-life cases to illustrate how the process affects the institution's finances.
"You want to think about tailoring that education to their practice area and being very focused about how their area impacts the system, whether they're a surgeon or a cardiologist, and talking specifics about what it looks like when you charge a heart catheterization, for example, and the reimbursement principles around that. It's educating them from a specialty case education perspective, but then also tying real numbers to that," Dunn says. "I find that one of the best ways to get both clinicians and physicians involved is by actually showing them the bottom line from missed charges and incorrect documentation, and what that really means to the facility in terms of revenue."
Dunn also recommends facilities pay special attention to how documentation screens are built. With charges being made by automated systems, linking appropriate documentation to those charges is crucial. Dunn says charge documentation must be mapped correctly in the facility's system to maximize charge captures.
How often a facility reviews its CDM depends on its size and resources. An organization with a CDM team may perform semiannual or quarterly updates, although Mancuso points out that with certain payer contracts, percentage increases may be spread out over the course of the year. No matter how large or small an organization, it should update its CDM at least annually.
"There are a lot of changes on an annual basis, as far as pricing and reimbursement go, that are driven by Medicare rules," Meadows says. "If you're not keeping up and making changes and adjustments, as those rules and reimbursement methodologies change, you can be certain that you're missing revenue and charges in your CDM."
— David Yeager is a freelance writer and editor in southeastern Pennsylvania.