Reducing Hospital Revenue Leakage: Linking Your Hospital's Item Master and Chargemaster

In a presentation at Premier healthcare alliance's Breakthroughs 2011 on June 16 in Orlando, Katie LeBlanc, senior director of revenue integrity for Catholic Healthcare West, and Kelley Blair, senior vice president of professional services at Craneware, Inc., discussed the importance of linking a hospital's item master and chargemasters for reducing hospital revenue leakage.

Linking the item master and supplies purchased including costs of those supplies with the hospital's chargemaster allows hospitals to more easily identify codable supplies, ensure mark-up formulas are correctly applied to the chargemaster and compare the number of supplies purchased to those billed (thereby identifying lost revenue). "Supply chain revenue capture can be seen as a strategic initiative," says Ms. Blair, who notes that supply costs account for 15 percent of a hospital's median operating budget.

While linking the item master and chargemaster can be beneficial to hospitals, the process can be a very arduous one if done manually. Ms. LeBlanc described the process as "translating all of your purchases into how you're going to charge for these items."

Few hospitals have yet to link their item masters and chargemasters, but some more advanced systems, such as Catholic Healthcare West, have successfully linked the two. CHW began the process seven years ago, and now, when any supply is entered into the item master, an appropriate billing code is applied to the item, helping to ensure CHW bills accurately for it, said Ms. LeBlanc.

When CHW embarked on the process, most of the linking was done manually. However, Ms. Blair noted that Craneware now offers Supplies ChargeLink® to automate this process.

In addition to reducing revenue leakage, linking item master and chargemaster systems reduces workload since the same database is used for the item master and chargemaster. "There is no need to maintain two files… and updates of costs, new items and changed items are available in real-time," said Ms. LeBlanc.

Ms. LeBlanc also said CHW has the ability to run quarterly reports to rebase the chargemaster to ensure costs reflect any changes in supply costs.

"Linking the supply chain and the revenue cycle is a key step to ensuring revenue integrity," said Ms. Blair. "Additional reimbursement is out there if [hospitals] code correctly and know what they're purchasing."

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars