Tightening the chargemaster to prevent 'revenue leakage'
Errors could lead to lost income, fraud charges
The typical hospital chargemaster, also called a CDM, tracks 15,000 line items. Each item is assigned a code representing a different service, procedure or product used in providing care to patients. The steady stream of changes to industry regulations, pricing and billing means any number of these codes can need to be updated at any time. No easy task.
CDM errors lead to lost revenue in the form of denials, missed opportunities for charging for services and simple billing errors. Given the number of transactions that occur at a hospital in just a 24-hour cycle, errors add up. Further complicating matters is the call for standardization to accommodate the use of electronic medical records and new health information systems.
"The biggest challenge we have is establishing a complete and accurate charge capture," said Micky Allen, director of revenue integrity at UMC Health System of Lubbock, Texas. Allen's primary facility is the University Medical Center, a 412-bed public hospital affiliated with Texas Tech University's Health Sciences Center. "People don't realize how much money is being left on the table."
For help with UMC's chargemaster, Allen turned to Craneware's chargemaster toolkit and bill analyzer.
In addition to Craneware's ability to track code changes from the Centers for Medicare & Medicaid Services, Allen concluded that the tools are "pretty robust, from a compliance standpoint and a value standpoint. (They) look for charges linked to other charges that you're not capturing. And then there's best practice (recommendations). We realized these are really good tools with great support."
Allen estimates that in the first year alone, using Craneware products added $750,000 to UMC's bottom line.
"The biggest benefit is the software takes the burden off the chargemaster staff," said Kelley Blair, senior vice president of professional services at Craneware. Frequent software updates, she added, allow an organization to "refocus their attention on educating staff. The best thing that a chargemaster team can be doing is being out in the hospital making sure the clinical folks are entering data correctly, using tools correctly, doing value-added work."
While hospital financial staffs work to plug revenue leakage, what about organizations that merge or absorb new facilities? How can people suddenly responsible for multiple, disparate chargemasters hope to mesh data? That's where Panacea's CDMsynch tool comes in.
"It's a sign of the times," said Frederick Stodolak, CEO of Wesley Chapel, Fla.-based Panacea Healthcare Solutions, which has a long record of working with chargemasters. "Hospitals within the same health system often for the same services are charging different prices, and using different revenue codes. Aside from a data-integrity problem and a reimbursement problem, inconsistencies could also cause a consumer problem," such as publically stated questions about pricing, or, worse, charges of fraud.
The beauty of the CDMsynch is that it is compatible with a number of chargemaster databases, according to Stolodak.
"All our system requires is a chargemaster itself, and we like to get usage data," he said. "Understanding the hospital's volume of work during the synchronization process helps us to focus our attention on what codes and procedures are the most significant (to a hospital)."
