Annual Conference: For hospitals, effective chargemaster management can bolster revenue capture

Amid the changes and challenges buffeting the hospital and health system sector, chargemaster management remains a key step in protecting revenue, according to a presentation this week at HFMA’s Annual Conference.

At University of New Mexico Hospital (UNMH), a recent chargemaster initiative began with a thorough review, said Holly Cruz, senior financial analyst with University of New Mexico Health Sciences Center.

Seeking to establish “a squeaky clean chargemaster” going into 2023, Cruz said, the organization looked for codes that had been deleted or replaced, missing CPT and HCPCS codes, appropriate matching of clinical codes to revenue codes, and appropriateness of hardcoded modifiers.

During such a process, “It’s extremely important that clinical education occurs to ensure proper charge capture and supporting documentation,” said Samantha Renico, customer success manager with The Craneware Group. “It [also] is recommended that when conducting your initial review, involve your clinical department leaders. This is an opportunity for two-way education, with the department leaders giving you some insight into their day-to-day, what charges they’re selecting and why. And then you have that opportunity as well from a revenue integrity perspective to give them education on the industry.”

The impact of a good audit

A quality review audit at UNM Sandoval Regional Medical Center pinpointed 75 action items across 25 departments. The top priorities to be addressed were identified as:

• Charge reconciliation
• Missed charges
• Volume discrepancies
• New-technology add-on payments
• Charge codes

All action items were linked to a dollar impact, which was calculated based on a “conservative usage amount” of 12 times per year multiplied by the applicable ambulatory payment classification or Medicare Physician Fee Schedule rate, Cruz said.

The estimated ROI was “incredible,” she said, noting it amounted to more than $84,000 per year for the 72-bed acute care facility.

Although a list of 75 action items might seem daunting to address, “That’s going to also instill things to look for and ensure that [they’re] not happening again,” Renico said. “It’s getting to the root cause and fixing it there as opposed to just throwing band-aids on things as they come up.”

Following up on the audit

After the initial review, organizations should strive to maintain a clean chargemaster. Charge entry and reconciliation is one category of maintenance that should be addressed daily.

“Industry rules and coding, that’s always changing throughout the year,” Renico said. “We really want to keep up on those to ensure that if there is any impact, you’re making those appropriate adjustments as soon as possible.”

Other short-term maintenance items include change requests from clinical teams.

“Depending on demand, we could have a handful each day or nothing at all,” Cruz said. “Before we accept a change, we have the ability to review required approvals and verify appropriate codes. Once accepted, our goal is to complete the build within seven days.”  

She added, “If at any time the requester wants a status update, they can log into our portal and track how far along their request is in our workflow process. This definitely eliminates a lot of emails back and forth.”

The volume of requests may necessitate an automated solution. Any such solution should be merged with the organization’s patient accounting system, with discrepancies resolved efficiently to avoid affecting charge capture.

At UNMH, an automated process extracts all bills in the patient accounting system starting every Sunday evening.

“When we come in every Monday morning, we’re able to set up the reconciliation of all implementation errors and make those corrections immediately,” Cruz said.

“The team comes in, they know they’re going to work those discrepancies right away,” Renico said. “It’s just part of their normal day-to-day, incorporating that cadence into the mix. It also reduces a lot of the human error that can come up.”

A broader view

Other aspects of chargemaster maintenance can take place less frequently.

For example, a volume analysis should be conducted monthly to spot trends or changes that may need to be addressed. The chargemaster also should be made available to all departments on a monthly basis if access isn’t available on-demand.

“There is power in visibility and transparency,” Renico said. “This gives stakeholders an opportunity to ultimately become more accountable for their charges.”

Changes to CPT and HCPCS codes should be reviewed quarterly and annually, with education provided to impacted departments. A more comprehensive volume analysis also should occur annually, as should a pricing analysis.

In addition, department meetings should be conducted annually “to get that holistic picture [of] the processes that can result in inaccurate charge capture or charge amounts,” Renico said. “With items no longer expected to be used, such as [during a] three-month time frame, make sure you get those deactivated.

“Don’t forget that when you’re reviewing those other updates, look at your charging screens and other downtime paperwork and make sure those items are removed entirely so they can’t be used in the future — really just closing that loop.”