September 19, 2007
Updating and maintaining an accurate chargemaster is an essential piece to an organization's financial health and to the quality of reported data. However, maintaining the chargemaster is often viewed as a time-consuming and burdensome process. Don't let this critical undertaking overwhelm you. Tools exist that will decrease some of the challenging aspects of such a complex task. An article in the June 2007 Revenue Cycle Strategist newsletter presents a checklist providing seven areas that facilitate a quick and easy assessment of the current chargemaster using the Centers for Medicare and Medicaid Services' (CMS) release of Addendum B for the hospital outpatient prospective payment system.
CMS's Addendum B, issued quarterly, lists payment information by healthcare common procedure coding system code. Assessing the chargemaster shortly after the release will assist in keeping charge items updated. CMS also releases a quarterly OPPS Summary of Changes Transmittal, which describes all revisions for the upcoming quarter. Check the document in conjunction with the addendum spreadsheet, as CMS occasionally modifies information originally printed in Addendum B. Note that the vast amount of changes generally occur in the release for Jan. 1 implementation.
Seven Areas to Review
Using a database application to compare CMS's addendum B and the current facility chargemaster can instantly identify the following highlighted areas of review:
- Deleted current procedural terminology/HCPCS codes
- New CPT®/HCPCS codes
- Invalid CPT/HCPCS codes
- Medicare noncovered codes
- Pass-through code usage
- Non-pass-through (separately payable) code usage
- Same HCPCS, different price
Deleted Codes
Deleted codes surface when the reported CPT/HCPCS code has been deleted from the CPT-4 or HCPCS Level II code manuals for Medicare reporting. Deleted codes can be identified on Addendum B with Payment Status Indicator (SI) = D, for discontinued.
New Codes
New codes are identified when CPT/HCPCS codes have been added to the CPT-4 or HCPCS Level II code manuals that are not present in the current chargemaster. New codes can be identified on Addendum B with Comment Indicator (CI) = NI or NF.
Invalid Codes
Invalid CPT/HCPCS codes are invalid codes based on the current list in Addendum B. Often, invalid codes are a product of transposing numbers or imputing a letter, such as "O" instead of the number "0" (e.g., entering GO378 when the correct code is G0378).
Medicare Noncovered Codes
Noncovered codes are those CPT/HCPCS codes not covered or not recognized under CMS's OPPS. Noncovered codes are designated with an ambulatory payment classification status indicator of B, E, or M. Often alternative codes are available to represent the same service as the noncovered code (e.g., 33240, insertion of pulse generator should be reported as G0297 or G0298 for Medicare claims).
Pass-Through Codes
The guidelines for passthrough items require drugs, biologicals, radiopharmaceuticals, and devices be assigned a pass-through status for a minimum of two years to a maximum of three years. Beginning Jan. 1, 2007, approximately 62 drugs and biologicals are currently eligible for pass-through payment. Pass-through CPT/HCPCS codes are represented with a status indicator of G or H. All items eligible for pass-through payment should be present in the chargemaster if they are provided for your patients.
Non-Pass-Through Codes
Drugs for which the median cost per day is greater than $55 are paid separately and, therefore, are not packaged into the administration with which they are billed. These separately payable drugs have been given the status indicator of K. Review of the applicable non-pass-through codes may be necessary to confirm that your chargemaster is complete.
Same HCPCS, Different Price
According to the Provider Reimbursement Manual— Part 1, Chapter 22, section 2202.4, "Charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient." Regardless of your compliance department's perspective on same services with different prices, this area of review will highlight such line items in question.
How to Do It
Most comprehensive chargemaster analyses include at the minimum the seven areas of review presented as well as evaluation of all line items, interviews with individual department managers and supervisors, assessment of billable/nonbillable items, and delivery of in-service education. However, engaging in this type of process as often as updates are instituted can be costly. When a comprehensive chargemaster review is not feasible, regularly assessing the chargemaster for the seven areas suggested using a database application is a cost-effective method to assist with keeping your chargemaster up-to-date.
SOURCE: Lauree E. Handlon and Kim L. O'Neil, Master Your Chargemaster, Revenue Cycle Strategist newsletter, June 2007
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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 19. Copyright 2007, Healthcare Financial Management Association. All rights reserved.