Charge Capture

Avoiding the High Cost of High-Capture Leakage

August 23, 2017 4:56 pm

A 14-hospital health system serving four states gained $7.5 million in recoverable net revenue in 15 months after adopting a new charge 
integrity system.

Breakdowns in charge capture present a significant obstacle for providers whose margins are already thin. As much as 1 percent of net charges are lost due to charge integrity leakage. These errors, such as charges billed for services that differ from documentation, incompatible or even contradictory charges between hospital and professional claims, and services that were never charged at all, pose threats to payment. These issues, which cost health systems millions of dollars annually, are too substantial to overlook.

In 2015, Novant Health, a 14-hospital health system serving Virginia, Georgia, and the Carolinas, began an effort to improve charge integrity and educate clinical teams on opportunities to do so. The health system, which operates with an annual net patient revenue of $4.3 billion, was digging into the massive amount of data that its charge capture system provided in hopes of spotting trends that would help the organization take control of revenue leakage. Every week, the charge capture system was reporting upwards of 1,200 missing-charge errors, each of which required members of the revenue and clinical teams to parse through the data manually. Health system leaders realized they needed to look beyond typical issues such as human error to ascertain why there were so many missing charges. First, however, they had to address issues with the charge capture system itself.

Identifying the Real Issues

Prior to beginning this initiative, Novant Health had been applying quick fixes to its aging system by forcing counterintuitive workarounds. Through revenue meetings and discussions with the clinical team, health system leaders realized they needed to take a new approach.

Sorting through the mountains of data from Novant Health’s legacy charge capture system became an all-hands-on-deck effort for the revenue integrity team. For five weeks, the group met two to three times a week for eight hours at a time. At these meetings, team members would discuss different types of errors that were found in the system to determine where errors originated and designate each error as a charging-policy issue or a problem with the charge capture system. The team also identified a major issue: Approximately 70 to 75 percent of the flagged errors were “false positives,” not actual errors.

Practice and Process Hindering Progress

Novant Health’s billing practice didn’t always align with the way its legacy charge capture system processed items. For example, Novant Health’s policy stated that an injection given in the operating room (OR) should be billed within OR time, but the charge capture system made it difficult to build in this charging policy. As a result, each time such an injection was administered, an error would be generated. Reconciling these errors required a member of the clinical team to log into the system and review each charge—upwards of hundreds of false positives each week.

The aforementioned 1 percent revenue loss across the industry due to charge-related issues fails to take into account patient frustration, which was a deep concern for Novant Health, given that billing inaccuracies and charges that arrive months after a service is performed can play a large role in patient dissatisfaction. Compounding the issue, the charge capture system at Novant Health had been put in place before the health system’s electronic health record (EHR) integration and was set up so that the revenue integrity team could not review charges until after bill holds were released.

The teams working within the legacy system also had noted the counterintuitive nature of the existing tool, which required team members to go from folder to folder to try to isolate charge problems, often long after the fact. Each minute spent working with the charge capture system was time away from patient care. Reports from the charge capture system showed that clinical team members often put off logging into the system or stopped using it entirely. When the revenue integrity team sent emails about charge errors, clinical team members simply did not respond. Follow-up phone calls produced similar results. To get real answers, the revenue integrity team had to set up meetings to go through charges one by one with members of the clinical team. The time commitment was unsustainable.

Criteria for an Effective Charge Capture Tool

Taking into account the revenue integrity team’s concerns as well as feedback documented from other stakeholders, Novant Health’s leaders defined the following criteria that would be required from a charge capture system.

Strong and versatile reporting. Healthcare organizations need access to reliable data to be able to spot trends; however, a charge capture system must also be nimble enough to provide the data each individual service line requires. The revenue integrity team at Novant Health was organized around 14 clinical areas, each of which had its own reporting needs.

Trending views. Hospitals and health systems can better spot problems with charge integrity when they can view data in real time. Novant Health’s leaders wanted a solution that would allow them to see trends as they happened, the better to develop solutions quickly.

Charge accuracy and customization. The charge capture solution must provide the flexibility to adjust to a healthcare organization’s charging practices. Healthcare organizations should have the ability to make changes, such as turning off rules that do not apply, as necessary to avoid lost time reviewing false positivesand other preventable errors.

Simplified interface that is user-friendly. To decrease or eliminate the risk of human error, a charge capture system should be easy for clinical team members to use. Novant Health also was seeking a system that made reconciliation of charge errors a simple process.

Full workflow integration. At Novant Health, clinical teams spent a large amount of time reconciling charges—the oncology services center alone had two team members devoting two hours per day to charge issues. A system that allows for less frequent interactions can give clinical staff more time with their patients.

Integration with the patient-accounting system. To prevent delays in patient billing and improve the integrity of charge capture, a revenue integrity team must be able to spot charge opportunities on the front end rather than after a bill hold is released.

Capability to email reports. Both clinical and revenue integrity teams can improve efficiency when using a system that sends actionable data via email instead of requiring users to log in and mine for results.

Scalablity. Novant Health’s legacy system, adequate for its purposes when adopted, had begun to fail as the health system grew. The health system wanted to ensure that its next charge capture system could grow and adapt with it. On the wish list was a platform that captured immediate revenue opportunities and allowed the organization to explore any charge integrity and billing improvements that would arise in the future.

Taking Action to Drive Change

Using a new, more advanced charge capture integrity solution, Novant Health gained the ability to report on its 14 clinical areas, access training and support through personal assistance, and develop rules to address the false positives, with team members collaboratively recording the rules in a wiki. The system’s simple interface and user-customizable dashboards allowed for fast adoption, kept frontline team members’ weekly time in the system at a minimum, and put the emphasis back on improving patient experience.

Key to implementation of the new system was the systematic rollout process. During the first six months, the revenue integrity team members familiarized themselves with the new system and populated the wiki to identify their internal charging policies. Novant’s revenue integrity team then analyzed data from each clinical area to determine where to prioritize their launch efforts. The team reviewed data from a volume perspective, as well as the dollar amounts, to see where the greatest revenue leakage was occurring, and decided first to tackle surgical services and emergercy medicine because of the volume and dollar impact analysis.

The systematic roll-out was carefully structured to include in-person training, specific to each clinical area, including training on using the new system as well as on how to leverage the reporting functionality and dashboards.

The revenue integrity team also held regularly scheduled virtual check-ins immediately following the roll-out to ensure that the clinical teams had the opportunity to provide feedback on challenges or workflow issues. The team found that establishing a regular cadence of communication was critical to the effort’s success and helped hold clinical team members more accountable for their role in the implementation process.

After this training and learning phase, the system was launched for individual clinical teams, starting with the groups that had the highest need, including surgical services, the emergency department and then oncology. The revenue integrity team used its experience with the system to provide support as new teams came online. With each clinical area, the revenue integrity team members built a partnership around shared goals and shared wins as their efforts produced incremental progress. The implementation process took one year to complete across the organization.

Early Results

Early results at Novant Health were promising. In the first 15 months, the charge integrity solution had uncovered hidden pockets of recoverable net revenue totalling $7.5 million, even before all 14 clinical areas went online with the system.

Novant Health Recovered Revenue May 2015-May 2017

The time spent working through false positives also dropped drastically, from more than 1,200 per week to less than 100. This dramatic decrease helped reduce the costs linked to working through charge issues and gave team members the time to address the root causes of revenue leakage.

The revenue integrity team also gained the ability to spot trends leading to improvement opportunities by bringing in ambulatory team members. Partnering with ambulatory, IT and the charge master assistant director enabled the revenue integrity team to have the correct scoring logic for charges built into Novant Health’s EHR. This automation not only eliminated a cumbersome manual process but also reduced errors that arose when clinicians tallied evaluation and management (E/M) charge scores separately on paper and later entered for billing.

For example, when the team identified a rapid spike in E/M-level charges being missed within a specific clinical area, it investigated and learned that the clinical area had recently changed its workflow such that nurses were calculating and applying E/M-level charges manually again. Modifications were made to Novant Health’s EHR so the scoring logic would apply the appropriate E/M-level charge and eliminate the false positives.

In the health system’s surgical services area, missing charges also were uncovered through a review of trends. The IT team added logic enabling the surgical services team to enter criteria directly into the EHR system, which would calculate an E/M-level score and immediately apply the charges. The result has been a reduction of missed E/M-level charges from hundreds to just a few per week.

Communication between the revenue integrity team and clinical team members also improved after the rollout, which included a centralized email system for reaching Novant Health’s revenue integrity team. A centralized mailbox gave clinical teams a single email address through which to seek help. All emails were quickly routed to the appropriate revenue integrity team member.

Open communication between departments has fostered a two-way flow of information between the revenue integrity team and clinical teams. User-customized dashboards also encourage clinical teams to identify data patterns and trends and to alert the revenue integrity team of needed changes.

As use of the new system continues, the revenue integrity team has prioritized daily interaction with expert auditors to ensure information accuracy and reduce the potential for lost claims due to untimely filing. A computer-based learning system also has been developed so that new users of the charge capture system receive consistent and thorough training to reduce billing inaccuracies that stem from human error.

Ultimately, the new system and associated workflow changes have allowed Novant Health to identify large revenue opportunities, add charges that previously were missed, and modify workflows to reduce or eliminate errors. Both clinical and revenue integrity teams indicate that the information they receive about charge errors truly reflects missing charges, not errors in the system itself.

Lessons Learned

In addition to revenue, Novant Health also gained knowledge on how to successfully change a legacy charge integrity system that was no longer effective. Organization leaders recommend the following approaches:

  • Determine the impact of the current system on patients, and keep the patient top of mind when considering solutions.
  • Build solid relationships between teams and foster the collaboration necessary for success.
  • Ensure that all internal stakeholders truly understand how their involvement impacts the patient experience. Log all feedback and review it regularly to ensure the new system solves the right problems.

Leadership and staff should be open to the idea of modifying workflows to suit the organization’s charge capture system. However, creating workarounds for an outdated system will not solve the underlying problems and may create others. With systemwide collaboration among leadership,clinical teams, and the revenue integrity team, a healthcare organization can maximize the effiency and usefulness of its charge capture system.

Harriett Johnson is assistant director of revenue integrity, Novant Health, Winston-Salem, N.C.

Dan Ward is vice president of Strategy at ZirMed, Louisville, Ky.


a. Smith, C. “Capturing All Charges: the Operational Reality,” hfm Blog, Jan. 21, 2016.


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