Are you a master of charge capture? One healthcare organization lost more than $2 million annually because its chargemaster was out of date. In another, the radiation department system was not integrated to the hospital system, resulting in half the charges being erroneously dropped

Healthcare Financial Management, March, 2005 by Bruce Morgan, Jim Brown

These charge integrity teams also represent a new strategy that providers are employing--the establishment of revenue management "SWAT" teams. This collaborative approach pulls together historically disparate functions such as registration, medical records, patient accounting, and reimbursement to make sure all clinical events are optimally captured, billed, and reimbursed. This end to end integration has proven to be an effective strategy in maintaining systemwide charge integrity by establishing lines of communication and accountability across the entire revenue cycle.

Investing in a clinical cataloging and charge integrity review can be quite beneficial. It would not be unusual for an institution to realize up to 1 percent improvement in net revenues after completing such a review. Hospitals also can use the data gleaned from this diagnostic process to recoup lost payments for items such as pharmaceuticals and select high-cost supplies.

Using Technology to Improve Revenue Realization

The process by which a hospital's charge capture data are funneled through the patient accounting system is extremely complex. Thousands of lines of code, ambiguity between medical records and chargemaster entries, and multiple systems feeding the chargemaster make managing this system very challenging. Increasingly, providers are using new, high-tech diagnostic tools to evaluate the accuracy of each data source and ensure that adequate connections exist.

Data management tools. Some tools supplement existing edit reports; however, they emphasize revenue to expedite the discovery of revenue-improvement opportunities. Typical problems these data management tools uncover include:

* Line items with invalid or missing Current Procedural Terminology/Healthcare Common Procedure Coding System codes based on current billing requirements

* Items with different codes but the same or similar descriptions

* Miscellaneous charges that should be broken out and billed separately to improve payment

* Inconsistent front-end charge capture per clinical event (for example, not billing a pacemaker when a pacemaker insertion procedure is billed)

* Services captured in one system but not appropriately linked to another

Chargemaster management outsourcing. Technology advances are also enabling many larger health systems (those with multiple hospitals) to effectively outsource coding updates of the charge master and create a "corporate chargemaster." Through this approach, all locations' chargemasters are managed at a single site, with the individual chargemasters tied into one system. This allows organizations to more efficiently and consistently manage billing practices and compliance programs while providing flexibility for different processes at outlying hospitals.

Claims integrity review tools. The claims diagnostic begins with the end results that drive payment--data produced from the claims processing component of the revenue cycle--and works backward to identify and fix the root causes of revenue leakage. The review emphasizes coding or charge capture irregularities that may drive the inaccurate recognition of revenue but not be caught by standard billing system edits. Technology tools can aid this process by analyzing claim detail and payment remittance data to diagnose revenue leakage areas. Sample findings may include: