Chargemaster reviews promote outpatient revenue integrity

Question

We are experiencing increased denials and loss of revenue as a result of chargemaster issues related to outpatient services coding. What steps can we take to identify the issues and clean up the chargemaster?

Answer

The rise in outpatient services provided at various outpatient locations adds to the complexity of revenue integrity challenges. Proper outpatient coding, documentation and charges are increasingly important to reduce and prevent denials as well as ensure accurate reporting and payment.

Knowing the seven likely factors related to outpatient account challenges and what three strategies to implement for chargemaster integrity is key to a thorough review of the chargemaster.

7 outpatient account issues to know

Be aware of these seven outpatient account factors during chargemaster review:

1. Coding errors and documentation gaps such as missing CPT codes and the ability to show medical necessity
2. Hard-coded codes, assigned by the chargemaster that are not visible or available during soft coding
3. Inadequate or missing charge-validation processes
4. Outdated or invalid chargemaster
5. Lack of process to assign correct and applicable modifiers
6. Timeliness of charge entry
7. Absence of internal charge reconciliation process within ancillary departments

Chargemaster review and maintenance avoids denials

Denial management requires a thorough chargemaster review to understand what is causing denials, followed by ongoing maintenance to avoid future potential issues. Department managers must carefully evaluate their department codes related to the chargemaster to make sure the designated codes are being used properly. Ensuring accurate CPT/HCPCS codes is the main concern in a chargemaster review. Because these codes are hard coded in the chargemaster for most ancillary departments, an annual review for new, revised and deleted codes is critical to ensure proper payment.

HCPCS codes are updated quarterly and yearly. For quarterly HCPCS updates, ancillary departments should review new, revised and deleted codes, and verify current usage in their department chargemaster and update changes. Failure to regularly update codes increases the
likelihood of using outdated codes and increased denials.

For example, during a recent chargemaster review, it was determined several outdated codes were still being used, and there was no chargemaster coordinator or other individual solely responsible for monitoring the chargemaster additions or deletions. Using outdated codes resulted in billing edit/claim denials and shifted responsibility for addressing the issue to another department.

To prevent similar issues, which negatively affect both revenue capture and the patient experience, it’s important to have well thought-out strategies in place.

3 strategies to ensure chargemaster integrity

As an integral part of chargemaster maintenance, consider the following three strategies to help ensure chargemaster integrity.

1. Conduct onsite interviews with individuals from each department. Along with the chargemaster review, interview each person from each department listed on the chargemaster. Go through their processes, understand their workflows, discuss pain points and explore solutions.   
2. Create a charge capture reconciliation process. Using a report of all cases completed the previous day, review all charges. Assigning this task to someone in each department ensures the most thorough review. For each unit that has a service and service line, check each patient’s documentation to match charges with treatments/procedures.
3. Establish best practices to proactively identify issues. Maintain the chargemaster routinely, develop a payment integrity program and appoint a chargemaster coordinator and team to oversee the maintenance process. Department managers should review individual department charges at least every three to six months for any updates within their services.

Additional best practices include the following:

• Meet with key departments to understand how they bill/charge for goods and services.
• Establish or refine your internal process for staff to submit additions, deletions and changes to the chargemaster.
• Educate staff on chargemaster changes and ensure there is financial executive leadership involvement prior to making any changes to the chargemaster.
• Review any/all paper charge tickets against the chargemaster.
• Constantly monitor edits and denials to determine if they trace back to the chargemaster.

Chargemaster review and maintenance will help eliminate denials by ensuring all codes, supplies and revenue codes are up to date and accurate. Addressing pre-billing edits related to hard-coded claims can ensure correct coding and appropriate payment. And, the good news is that chargemaster clean-up projects deliver immediate results. However, organizations must continually track outcomes and performance. Revenue integrity requires rigorous oversight of chargemaster integrity.