June 27, 2007
A review of data from more than 100 hospitals, which encompassed more than 30,000 complete medical records and comprehensive billing and collection records, showed that, on average, the organizations were losing 1 percent of revenue to errors in the chargemaster or charge capture.
An HFMA report, sponsored by 3M Health Information Systems, notes that hospitals typically are not aware of the degree to which they may be missing charges. A hospital may have a chargemaster that appears to be well maintained, yet the facility still may be losing revenue because it lacks adequate controls to identify each charge capture opportunity. It's not necessarily that mistakes are being made. Rather, chargemaster administrators often are not able to keep up with changing codes and regulations, so those changes are not making it into the chargemaster. There is so much to know and so many changes occurring that opportunities for missed charges are plentiful.
Thus, hospitals may try to manage and maintain what's in the chargemaster, but it's also important to look at what's not in the chargemaster. For example, associated procedures, or procedures that are often performed along with a main procedure, may be missing from the chargemaster. Hospitals may have new devices and services that don't make it in. Some devices or supplies included within a large package of items can be billed separately, but may not be included as separate line items in the chargemaster.
Appropriate charge capture is not only important for capturing revenue but also for tracking use of resources. In addition, missed charges may prevent the hospital from accumulating enough dollar value to hit an outlier, which also results in a missed revenue opportunity.
With so much to monitor, how can a hospital keep pace? The key to improvement is implementing an appropriate combination of procedures, staff education, and technology to ensure that charges never get lost in the first place.
Where to Look
Healthcare organizations use a number of strategies to identify where charge capture needs to be improved.
Rush University Medical Center, a 700+ bed facility in Chicago, attempts to reconcile charges daily, according to Jennifer Hackett, director of healthcare finance. That means if 100 patients were seen in, say the emergency department, there should be 100 charges for that department.
The reconciliation process can begin by counting charge tickets, or the master list of services, for a particular department. The number of charge tickets should match the patient census for a given area on a given day. The next step is reconciling whether a charge has been entered for the total number of patients, Hackett explains.
"If you're doing that within 24 hours following the date of service, you can probably capture some missed charges right away," she says.
The hospital also monitors revenue and usage reports, Hackett adds. For example, if 50 charges for a certain item are expected during a certain time period, such as one month, but none are charged, "It might be a flag where we go back and ask `Is there a problem with charges being processed or did we truly just have a volume dip?'" she says.
Often hospitals will also perform an audit or charge capture review, a manual process that compares what services and devices were documented on a patient's chart against what was charged on the claim.
Rush performs ongoing audits, one of the chargemaster typically around October and January, when changes to Medicare's CPT codes are implemented, says Hackett.
"We will also do a charge capture audit with a department when there are changes with any kind of computer system, if there is any kind of significant staff turnover, or if it seems like it an area where there may be benefit to have additional exposure to these kinds of activities," she explains.
Volume also can determine what and when to audit. During the past 18 months, Advocate Health Care, a not-for-profit organization of eight large and small hospitals in the Chicago area, performed audits in the departments of radiology, interventional radiology, cardiac catheterization, and laboratory, according to Wendi Accardi, director of the chargemaster revenue and compliance department for the Oak Brook, Ill.-based system.
Accardi says the departments were audited because they are large departments with hundreds of line items, meaning hundreds of codes, and increased potential for error.
The health system also conducts defense audits when insurance companies request reviews of patient claims. "We have also identified charge capture opportunities during our defense audits that provide us with the opportunity to capture lost charges as well as analyze issues we probably would not have caught by other means," Accardi notes.
Strategies for Improved Accuracy
At Pensacola, Fla.-based Baptist Health Care, which has four acute care hospitals ranging from a 25-bed rural critical access hospital to a 500-bed urban facility, the charge capture area is embedded into the not-for-profit's 10 standards of performance.
"We try to make sure that every employee recognizes that accurate charging is part of their job, even if their primary responsibilities are clinical," says Andrew Terry, vice president of revenue management.
Managers receive more detailed training in charge capture issues, and each clinical department has a chargemaster liaison who is actually located onsite within the department, Terry adds. The liaison is responsible for working with the chargemaster administrator as part of regular meetings with reimbursement department staff who oversee charge capture compliance and accuracy.
When an issue arises, the health system works hard to find solutions. A few years ago, Terry says, it became clear that interventional radiology had a charge capture issue because of the number of pended claims being seen. An outside audit of 100 claims showed that they weren't being processed correctly. To address the issue, Baptist created a position located within the clinical department but budgeted to the finance department responsible for reviewing all of the claims before they were sent out. In just six months, the auditor was able to capture $400,000 in charges that otherwise would have been missed, more than enough to justify the cost of the position, Terry says. The position worked out so well in fact, that the auditor now handles charge capture in another challenging area—the cardiac cath lab.
"We put enough improvements in the process that the billing for interventional radiology is much better today than when we started the auditing," Terry says.
Source: HFMA Educational Report: Missed Opportunities - Your Strategy for Correct and Complete Charge Capture
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If you have questions or comments about HFMA Wants You to Know, contact editor Maxine Harrison.
HFMA Wants You to Know ISSN: 1540-0697. Volume VI, Issue 13. Copyright 2007, Healthcare Financial Management Association. All rights reserved.