Blog_Best practices for chargemaster_08182021

Five best practices for chargemaster maintenance

August 18, 2021
August 18, 2021

As a database of information and prices connected to every component of the healthcare experience, the chargemaster is critical to the revenue cycle and plays a vital role in supporting healthcare providers’ financial health. A hospital's charge description master, also known as the chargemaster or CDM, is a database of all items involved in patient care, including supplies, services, medications, and their associated prices. Used to charge patients, a typical chargemaster line item contains the information necessary for inclusion on a patient's bill so that a claim for care can be paid. Chargemaster maintenance is an ongoing process to ensure that services, drugs, and supplies are accurately charged and compliant with CMS and other payer regulations so that a healthcare entity receives appropriate reimbursement. 

Five best practices for chargemaster maintenance

In order to ensure that healthcare organizations are maximizing their reimbursement for every component of care provided to patients, measures must be instituted that reduce claim and line-item denials. Some clear advantages for chargemaster maintenance include:

1.    Create a written protocol. This set of guidelines must be readily available to all who need it and should contain the process for submitting revisions, additions, deletions, and deactivations into the chargemaster, as well as the person or position who can approve CDM changes. If there’s an approval hierarchy, it must be incorporated. If a technology solution is involved, a workflow component will facilitate getting approvals electronically and then tracking them. The protocol also needs to include the turnaround time for an approved item and who in the organization really is responsible for making sure those changes are in the chargemaster.

2.    Establish processes. These will ensure that the order entry or the manual charge ticketing system accurately reflects the services provided and that all services in the order entry or the charge ticket are reflected in the chargemaster. In addition, review the order entry system and charge tickets to ensure that anything on either of those systems or the ticket will be removed if no longer needed or updated appropriately.

3.    Create guidelines for the frequency of CDM updates. Quarterly coding changes are disseminated by the AMA and CMS and are relevant for CDM updates. Annually in January, April, July, and October, healthcare organizations will get information prior to the effective dates for any coding changes that need to occur within the chargemaster. Ancillary departments should conduct a brief review of their chargemaster monthly to make certain it is current and reflective of everything being provided to patients. In addition to regular reviews for CMS updates, there needs to be a schedule for adding new procedures, services, drugs, and supplies, as well as incorporating price changes. Other regularly reviewed items include CPT/HCPCS and revenue codes for accuracy, as well as attention to the alignment of descriptions provided for CPT codes and the CDM to ensure accurate charging. 

4.    Monitor the CDM. Recommended ways to use monitoring to eliminate problems include:

  • Review charge amounts against reimbursement amounts.
  • Compare order entry/charge tickets with the CDM.
  • Provide clarification of descriptions/charges/codes and discuss procedures and miscellaneous charges with appropriate departmental staff
  • Monitor claims or perform chart reviews for compliance and reimbursement.
  • Routinely validate the need for any duplicate charges, zero-volume charges, or zero-dollar charges

5.    Educate staff and communicate changes regularly. Make sure all staff, including physicians, understand CMS regulations, changes, updates, fiscal intermediary bulletins, and regulatory components, to the extent that they affect the chargemaster and the processes involved in getting updates applied to the CDM itself. Whenever any new services, procedures, supplies, or drugs are added, you want to make sure staff is aware that these line items can now be selected when they're keying in the charges for services provided to the patient.

This blog post is based on the HealthStream webinar, Unlocking the Secrets of the Mid-Revenue Cycle:  Defending Your Chargemaster, presented by nThrive’s Director of Revenue Cycle Solutions, Sherry Nardi. Learn more about HealthStream’s reimbursement and revenue cycle solutions.

Request Demo