October 22, 2003
Are coding errors common in your organization? If so, you could be losing even more money than you might think. The cost of identifying, correcting, and documenting coding errors can add up to hundreds of thousands of dollars over the course of a year. And that doesn't factor in the lost or delayed revenue that results from denied claims.
The best way to significantly reduce, if not eliminate, such costs is to address the coding errors at their source -- the charge description master (CDM). CDM software can help in this effort. CDM software is relatively new to the market, so great care must be taken to select software that provides sufficient functionality and supportability.
The software can range in sophistication from a simple Excel-type spreadsheet containing up-to-date listings of all CPT/HCPCS codes to more sophisticated software containing complex clinical edits to identify coding errors and missing CDM items.
When evaluating CDM software, probe for specific information about the level of detail in the software and the sophistication of the software logic. Important questions to ask include:
- Does the software contain all of the latest CPT/HCPCS codes, including quarterly HCPCS updates?
- How often is the software updated for these code changes?
- Does the software merely supply a listing of the latest codes, or does it contain more detail about these codes (such as indicating which codes the latest codes replace, which codes are not covered by Medicare, and which revenue codes cannot be used with certain CPT/HCPCS codes)?
- When identifying erroneous codes, does the software only identify invalid codes, or does it identify codes that are valid but may have been incorrectly assigned to a particular service item?
- Does the software provide compliance-related information with appropriate reference sources, and is this information kept current?
- Does the software flag items with code and description discrepancies (such as drugs with missing or inconsistent dosage or route of administration information)?
- Does the software identify items potentially missing from the CDM and, if so, how? For example, does the software compare the hospital's list of coded CDM items against a list of all CPT/HCPCS codes, or does it limit the comparison to only departments for which the hospital has existing charge items?
- Does the software maintain all of the information in an easily accessible database?
- Is the software capable of generating appropriate reports?
When looking for the right software solution, you should not only evaluate the software product, but the software company as well, including how long the firm has been in business, its experience with CDM coding, the number of installations it has performed, its customer satisfaction, and its track record for ongoing support.
To determine whether you have a CDM problem and if CDM software might be a good option to consider, audit a sample of your current bills to determine how frequently they contain incorrect or invalid CPT/HCPCS codes or revenue codes. If you find that your billing-scrubbing software is cAudio Webcasthing a lot of errors, estimate how much time your staff is spending on making corrections that could have been caught at the CDM level.
SOURCE:
"Stem Revenue Losses with Effective CDM Management," by Michael Alwell, hfm, September 2003, pp 84-86.
Additional Resources
- Revenue Cycle: Comprehensive List of HFMA Products and Services
- HFMA Resource Center: Revenue Cycle Focus Area
If you have questions or comments about HFMA Wants You to Know, contact editor Laura Noble .
HFMA Wants You to Know ISSN: 1540-0697. Volume II, Issue 22. Copyright 2003, Healthcare Financial Management Association. All rights reserved.