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How To | Chargemaster

How a 3-phase approach can rebuild your chargemaster

How To | Chargemaster

How a 3-phase approach can rebuild your chargemaster

  • Review the entire process along with policies and procedures.
  • Before updating charge code items, use data analysis to generate a report that shows specific issues.
  • Develop policies and procedures on how to update and maintain the chargemaster.
  • Consider bringing the charging process to the point of coding.

The process of updating the chargemaster is often labor intensive and time consuming. It requires detailed work including investigation and research to ensure correct coding, charging and pricing. Yet, it must be done to ensure the following:

  • All charges are available for capture.
  • Correct HCPCS/CPT codes are assigned.
  • Charges are current.
  • Descriptions are clear and non-duplicative.
  • Respective revenue codes are accurate.

The outcome is worth the effort to help eliminate denials and achieve optimal revenue. However, a patchwork approach creates more problems than it solves. 

If not performed routinely, chargemaster cleanup can be a daunting task. At one facility, less than 40% of the charge description items were being used. In such cases, the solution is an overhaul of the chargemaster using a three-phase approach.

Phase 1: Process review

Conduct in-depth interviews with each department — radiology, emergency department, laboratory, pharmacy, oncology, respiratory, physical therapy and all others. Include department heads of service areas, lead departmental operational team members, and a representative from finance and revenue integrity. For example, a thorough review would involve interviewing two dozen or more clinical departments to determine services provided; procedures performed; and medications, devices and supplies used.

It is important to review the entire process along with policies and procedures. Ask the following questions about the process for charge posting:

  • Does everyone know what items are billable?
  • How is a billable procedure or supply posted on the patient’s bill?
  • Are charges verified?

For each department, use this information to create a detailed workflow diagram and conduct a chart-to-bill audit. Do the charges make it to the bill?

Finally, compile a report that includes a record of the following problems:

  • Charges that never made it to a bill
  • Incorrect charges
  • Incorrect HCPCS/CPT codes mapped to charges
  • Incorrect revenue codes
  • Duplicate charges

Phase 2: Analysis

Before updating charge code items, use data analysis to generate a report that shows specific issues. These might include charge codes missing a revenue code, charge codes with incorrect revenue codes or charge codes with invalid or missing HCPCS/CPT codes. Next, begin updating the charge code items. This is an arduous task that requires going through each charge code to ensure accuracy. However, the outcome — accurate payment that represents the actual care and resources provided — supports revenue integrity.

Phase 3: Review and revise

This is an educational phase that involves review and revision of the workflow diagrams for each individual department. The purpose is to optimize workflow and identify and address gaps. As part of the process, develop policies and procedures on how to update and maintain the chargemaster. For example, when you have a new service or supply, document the steps required to add that item to your chargemaster. Then follow up with training and education. For good measure, consider a quarterly maintenance program, which involves a quick scan using data analysis to check for invalid codes.

Bring coding and charging together

In addition to chargemaster cleanup, or as an alternative to an entire chargemaster update, some progressive organizations are bringing charging to the point of coding. This approach also consistently promotes chargemaster integrity following a cleanup.

See related sidebar: Strategies for positive impact on revenue integrity

Involving coders on the front end enables them to see what has been charged from the chargemaster and ensure accurate charge verification. And because coders know how to properly assign HCPCS/CPT codes, they can resolve edits at the point of coding, verify all charges, add missing charges and remove charges that are not supported by the clinical documentation.

This practice helps to uncover chargemaster issues by coders who are experts at identifying a missing or incorrect charge and determining how the HCPCS/CPT codes mapped to the charges affect the overall coding for payment. The coders are best equipped to resolve edits that surface once the charges (via hard coding) and the soft coding (coded by coders) are brought together. If a coder attempts to add a missing charge and finds no corresponding charge code in the chargemaster, there is an opportunity to create a new one. From that time forward, you can charge for that item.

For example, one health system in the Northeast recouped $1.5 million within three months in radiology charges alone.

Over time, breaking down silos to bring coding and charging together up front serves as a chargemaster maintenance tool that can significantly decrease denials, correctly capture and represent charges and result in a boost and retention of revenue. 

About the Authors

Caroline DeLaCruz, RHIT, CCS-P, CPC,

is manager Comprehensive Outpatient Revenue for Integrity Services at Pena4, Inc. (Caroline.delacruz@pena4.com).

Joseph J. Gurrieri, RHIA, CHP,

is president and COO at Pena4, Inc. (joe.gurrieri@pena4.com).


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