As the overall pricing list for hospitals' services and products, the chargemaster can potentially have a significant affect on an organization's financial picture. When correct data is used, it can help hospitals obtain appropriate reimbursement. However, if line items contain errors, hospitals could receive incorrect payments for care provided.
For these reasons it is critical that hospitals do routine reviews of chargemaster data, according to Elaine Dunn, DHA, and Katie Hartman, customer success managers at Craneware, a value cycle company.
"Most of your operational revenue gets driven out of the chargemaster so it really is critical to make sure the components you have in there are coded accurately, that they actually represent the services you are providing," says Dr. Dunn. "So if we have a line item in our chargemaster that we're charging and we're calling that an ankle X-ray, we want to make sure the service that we're providing is indeed an ankle X-ray."
She says the chargemaster is also a main focus for internal or external compliance review because so much of hospitals' revenue derives from the pricing list.
"Setting aside dedicated time to review charges with clinicians will help in achieving a clinically driven revenue cycle process," Ms. Hartman says.
But what should hospitals consider when doing this review? Dr. Dunn and Ms. Hartman provided the following five items to consider.
1. Goal of the review. Hospitals should consider what they want to get out of the chargemaster review and what they want the scope of the review to be, according to Dr. Dunn. Traditionally, chargemaster reviews have focused on examining CPT coding, revenue coding and pricing. However, "it's really an excellent opportunity to expand that scope and also focus not only on what charges are in chargemaster, but how are you using those charges, how are the departments leveraging those and expanding the discussion to include their charge capture practices," she says.
2. Needed data. Dr. Dunn says organizations should ensure the reviewer, whether internal or external, has access to all collateral data. "It's not just about handing over a copy of your chargemaster," she says "You want to make sure that you have your pharmacy formulary, your item master, your revenue and usage. Those are all things that are critical to a comprehensive...review that's going to get you the best end product."
3. Clinical engagement. Healthcare organizations should secure clinical engagement early on in the chargemaster review process, according to Dr. Dunn. The clinical side needs to weigh in on how its using chargemaster prices to achieve the best review possible. Plus, she says, a review is an opportunity to educate departments and reiterate the importance of charge capture and their role in revenue management for their department.
4. Partner alignment. Hospitals may select a vendor to assist with the chargemaster review, or possibly an internal partner, such as the organization's revenue integrity, corporate compliance or internal audit teams. Hospitals and health systems should ensure the review partner aligns with the scope of the review and has resources to help the organization follow through on post-review recommendations, according to Dr. Dunn. "We've all been in this position where we've been given this beautiful report with all these findings and recommendations, but actually executing on those is a completely different story. So you want to make sure you have a partner that can help you do that," she says.
5. Proper planning. Ms. Hartman says proper planning is important before a review occurs. She recommends providing each department with their revenue and usage data to check for accuracy to ensure the reviewer is working with correct facts and figures.