Master your chargemaster: is your hospital's chargemaster friend or foe? It's a vital element in the revenue cycle, but it can present challenges

Healthcare Financial Management, Sept, 2005 by Duane C. Abbey, Jodee E. Collins

Third-party payers are beginning to address the issue of nonemergency care provided in the ED. Most hospitals provide some urgent or clinical level care in the ED. Coding, billing, and Emergency Medical Treatment and Active Labor Act compliance are all considerations when nonemergency care is provided in the ED. Revenue codes that differentiate urgent care in the ED are:

* Revenue Code 451--EMTALA Screening

* Revenue Code 452--ER Beyond EMTALA Screening

* Revenue Code 456--Urgent Care

Any patient who presents will receive an EMTALA screening. If no emergency medical condition exists, the services would revert to revenue code 456. The CPT codes to be used with 456 are the regular Office Visit or Other Outpatient Visit codes. Hospitals should use revenue codes 451, 452, and 456 only if directed by a third party payer, because these codes involve extensive guidelines and billing directions. When mandated, making the transition to these codes is a major challenge for chargemaster personnel. Although the chargemaster can be set up to accommodate the codes, training and acclimating personnel to proper charge capture and charge entry is a challenge.

Durable medical equipment. DME and associated implantable items represent a special challenge for hospitals. By categorizing these items as implantable or nonimplantable, a better perspective can be gained. This will help chargemaster coordinators address the associated coding and billing processes. Although most compliance concerns revolve around the Medicare program, other third-party payers must be considered also; rules for coding, billing, and payment vary among them.

Hospitals encounter a vast array of implantable items, which may be permanently or temporarily implanted. For instance, a knee-replacement joint would be implanted for a long period measured in years. A catheter used for a coronary catheterization procedure would be implanted for only a brief period measured in minutes. Special Level II HCPCS codes apply for many implantable items. The entire HCPCS coding system should be carefully reviewed for possible use, especially the L-Codes and C-Codes. Although a code may exist for a particular item, payment is often bundled. For APCs, status indicator N may apply. For cases involving separate payment, the code drives the APC grouping and associated payment. For DRGs, bundling occurs regardless of the codes, although some special provisions for DRGs exist that involve provision of DME shortly before discharge.

Hospitals generally use the UB-92 to bill implantable items to the fiscal intermediary; the claims may involve APCs or DRGs. In some cases, it is difficult to determine whether an item should be billed to the FI, particularly with items described by L-Codes. The APC payment system helps determine which codes can be considered for billing to the FI by providing guidance on codes that must be billed only to the DME regional carrier. An HCPCS code listed with status indicator Y, nonimplantable DME, indicates the item must be billed to the DMERC. If there is no status indicator Y, the hospital needs to determine whether the item can be billed to the FI.